Piramal Enterprises, which sold off its domestic formulations business to Abbott in a multi-billion dollar deal a few years ago, is now shutting down its Mumbai-based R&D unit which would in effect bring to an end its early stage drug discovery business.
Separate media reports, citing Swati Piramal, part of the promoter group of the diversified firm and wife of group chief Ajay Piramal, said, the decision to move away from the drug discovery business was taken given the costs of basic research.
The company would now focus on molecules at an advanced stage of development; resources would be redeployed from basic research to the clinical unit.
Its other research facilities are located in Chennai, Hyderabad, Ahmedabad and Indore, which would continue to be functional.
Although Piramal Enterprises retains its exposure to healthcare as a sector, after selling the key pharma business, it is now more associated with financial services, including investments in infrastructure and real estate sectors.
In an unrelated development, the firm is forming a joint venture with Navin Fluorine International Limited, an Arvind Mafatlal Group company, to develop, manufacture and sell specialty fluorochemicals with a focus on applications in healthcare, according to a company release.
As per the agreement, Piramal Enterprises will hold 51 per cent of the equity share capital of the proposed joint venture company, whereas the remaining 49 per cent will be held by Navin.
In the first phase of development, the JV is expected to invest around Rs 120 crore in India for this project.
Mumbai-based Navin Fluorine has a turnover of around $100 million. It specialises in specialty fluorine. It had acquired UK-based Manchester Organics, a specialty fluorochemicals research company in 2011.
(Edited by Joby Puthuparampil Johnson)