Moneycontrol
Last Updated : Mar 28, 2018 02:13 PM IST | Source: Moneycontrol.com

From Sun to Cipla - Biggest M&As in the Indian pharma industry that made profits or bombed

Here are the biggest deals in the pharmaceuticals industry. Read on to find out which were successful.

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Aurobindo Pharma-Actavis Europe business acquisition | Year: April 2014 | Deal size: EUR 30 million (USD 36.9 million) Objective: Expand presence and portfolio in Europe Result: The acquisition turned profitable within two years of acquisition. (Image: Reuters)
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Aurobindo Pharma-Actavis Europe business acquisition | Year: April 2014 | Deal size: EUR 30 million (USD 36.9 million) Objective: Expand presence and portfolio in Europe Result: The acquisition turned profitable within two years of acquisition. (Image: Reuters)

Aurobindo Pharma-Natrol acquisition | Year: December 2014 | Deal size: USD 132.5 million Objective: To foray into nutraceuticals in the US. Result: The acquisition turned profitable from the second year with revenue from the acquired business increasing by over 12 percent CAGR over FY15-17. Natrol continues to be a stable growth contributor for Aurobindo’s OTC franchise. (Image: Reuters)
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Aurobindo Pharma-Natrol acquisition | Year: December 2014 | Deal size: USD 132.5 million Objective: To foray into nutraceuticals in the US. Result: The acquisition turned profitable from the second year with revenue from the acquired business increasing by over 12 percent CAGR over FY15-17. Natrol continues to be a stable growth contributor for Aurobindo’s OTC franchise. (Image: Reuters)

Jubilant-Draxis acquisition | Year: April 2008 | Deal size: USD 255 million Objective: To access high-end radiopharmaceutical market in North America. Result: The acquisition was profitable from the second year. However, the US launch of Ruby-Fill, at the time of acquisition, was delayed and the product was eventually launched in 2017. (Image: Reuters)
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Jubilant-Draxis acquisition | Year: April 2008 | Deal size: USD 255 million Objective: To access high-end radiopharmaceutical market in North America. Result: The acquisition was profitable from the second year. However, the US launch of Ruby-Fill, at the time of acquisition, was delayed and the product was eventually launched in 2017. (Image: Reuters)

Sun Pharma – Taro acquisition | Year: September 2010 | Deal size: USD 273 million Objective: To strengthen US portfolio and bet on a turnaround of the business. Result: Taro has been one of Sun’s most lucrative acquisitions, with payback within 3 years and return-of-capital of 641 percent. The acquisition strengthened Sun Pharma’s presence in the US.
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Sun Pharma – Taro acquisition | Year: September 2010 | Deal size: USD 273 million Objective: To strengthen US portfolio and bet on a turnaround of the business. Result: Taro has been one of Sun’s most lucrative acquisitions, with payback within 3 years and return-of-capital of 641 percent. The acquisition strengthened Sun Pharma’s presence in the US.

Piramal-Mallinckrodt pain portfolio acquisition | Year: January 2017 | Deal size: USD 273 million<br /> Objective: Get a portfolio of intrathecal spasticity and pain management drugs.<br /> Result: Yet to see any impact of the deal. (Image: Reuters)
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Piramal-Mallinckrodt pain portfolio acquisition | Year: January 2017 | Deal size: USD 273 million<br /> Objective: Get a portfolio of intrathecal spasticity and pain management drugs.<br /> Result: Yet to see any impact of the deal. (Image: Reuters)

Torrent Pharma-Elder portfolio acquisition | Year: December 2013 | Deal size: USD 323 million Objective: To expand India portfolio and scale up sub-optimal products. Result: Elder's portfolio acquisition turned out to be highly profitable for Torrent, with 23 percent CAGR of Elder’s brands over FY14-17. Torrent, the 12th largest (in terms of IMS sales) pharma players in India increased its market share from 2.0% to 2.7% in the country. (Image: Reuters)
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Torrent Pharma-Elder portfolio acquisition | Year: December 2013 | Deal size: USD 323 million Objective: To expand India portfolio and scale up sub-optimal products. Result: Elder's portfolio acquisition turned out to be highly profitable for Torrent, with 23 percent CAGR of Elder’s brands over FY14-17. Torrent, the 12th largest (in terms of IMS sales) pharma players in India increased its market share from 2.0% to 2.7% in the country. (Image: Reuters)

Dr Reddy’s-Teva (8 ANDAs/generic filings) | Year: June 2016 | Deal size: USD 350 million Objective: To strengthen US presence Results: Yet to deliver. Company awaits the launch of major products from the deal that are held up due to regulatory and patent-related issues. (Image: Reuters)
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Dr Reddy’s-Teva (8 ANDAs/generic filings) | Year: June 2016 | Deal size: USD 350 million Objective: To strengthen US presence Results: Yet to deliver. Company awaits the launch of major products from the deal that are held up due to regulatory and patent-related issues. (Image: Reuters)

Cipla-InvaGen/Exelan acquisition | Year: September 2015 | Deal size: USD 550 million Objective: To scale-up its US generics business and have a manufacturing presence in that market. Results: The InvaGen/Exelan buy has expanded Cipla’s US base, but failed to deliver on the commercial potential of limited competition filings such as generic Renvela and generic Fosrenol. Since the acquisition, Cipla has already taken USD 110 million of impairments on the acquisition, which accounts for nearly 20 percent of the acquisition cost. (Image: Reuters)
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Cipla-InvaGen/Exelan acquisition | Year: September 2015 | Deal size: USD 550 million Objective: To scale-up its US generics business and have a manufacturing presence in that market. Results: The InvaGen/Exelan buy has expanded Cipla’s US base, but failed to deliver on the commercial potential of limited competition filings such as generic Renvela and generic Fosrenol. Since the acquisition, Cipla has already taken USD 110 million of impairments on the acquisition, which accounts for nearly 20 percent of the acquisition cost. (Image: Reuters)

Dr Reddy’s-Betapharm acquisition | Year: February 2006 | Deal size: USD 571 million Objective: To get access to large, high-margin German generic pharma market. Result: Was a disaster for Dr Reddy's. Germany's policy move to source most medicines from the lowest-cost vendor through a tender-based model hurt the company. By FY10-end, Dr Reddy’s had written off all the intangible assets and goodwill attributable to the Betapharm acquisition. (Image: Reuters)
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Dr Reddy’s-Betapharm acquisition | Year: February 2006 | Deal size: USD 571 million Objective: To get access to large, high-margin German generic pharma market. Result: Was a disaster for Dr Reddy's. Germany's policy move to source most medicines from the lowest-cost vendor through a tender-based model hurt the company. By FY10-end, Dr Reddy’s had written off all the intangible assets and goodwill attributable to the Betapharm acquisition. (Image: Reuters)

Lupin-Gavis acquisition | Year: July 2015 | Deal size: USD 880 million Objective: To expand its US portfolio, especially pain management drugs (controlled substances) and get manufacturing base in the US. Result: Expensive deal with Lupin paying 9.2 times of Gavis sales, largest ever overseas acquisition by an Indian drug maker. Contribution from Gavis has been below expectations so far. The pace of approvals has been slow and the US crackdown on use of opioids isn’t helping matters. So far, sales are nowhere close to the expectation of the much-tempered target of USD 200 million in FY18. (Image: Reuters)
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Lupin-Gavis acquisition | Year: July 2015 | Deal size: USD 880 million Objective: To expand its US portfolio, especially pain management drugs (controlled substances) and get manufacturing base in the US. Result: Expensive deal with Lupin paying 9.2 times of Gavis sales, largest ever overseas acquisition by an Indian drug maker. Contribution from Gavis has been below expectations so far. The pace of approvals has been slow and the US crackdown on use of opioids isn’t helping matters. So far, sales are nowhere close to the expectation of the much-tempered target of USD 200 million in FY18. (Image: Reuters)

Abbott-Piramal acquisition | Year: May 2010 | Deal size: USD 3.7 billion Objective: To increase its presence in the Indian branded generics space. Result: Expensive deal with Abbott paying 8.8 times of Piramal sales. While the acquisition strengthened Abbott’s market position and product portfolio in India, sales growth are highly unlikely to reach Abbott’s USD 2.5 billion revenue target for 2020. (Image Reuters)
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Abbott-Piramal acquisition | Year: May 2010 | Deal size: USD 3.7 billion Objective: To increase its presence in the Indian branded generics space. Result: Expensive deal with Abbott paying 8.8 times of Piramal sales. While the acquisition strengthened Abbott’s market position and product portfolio in India, sales growth are highly unlikely to reach Abbott’s USD 2.5 billion revenue target for 2020. (Image Reuters)

Sun Pharma-Ranbaxy merger | Year: April 2014 | Deal size: USD 4 billion Objective: To improve market position, drive synergies and expand presence in emerging markets. Result: Sun Pharma is on track to unlock synergies of USD 300 million from the acquisition by end-FY18 driven by a combination of revenue, procurement and supply chain efficiencies as well as other cost synergies. But the resolution of regulatory issues at Ranbaxy’s plants proved to be tougher than anticipated. The deal is still under process. (Image: Reuters)
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Sun Pharma-Ranbaxy merger | Year: April 2014 | Deal size: USD 4 billion Objective: To improve market position, drive synergies and expand presence in emerging markets. Result: Sun Pharma is on track to unlock synergies of USD 300 million from the acquisition by end-FY18 driven by a combination of revenue, procurement and supply chain efficiencies as well as other cost synergies. But the resolution of regulatory issues at Ranbaxy’s plants proved to be tougher than anticipated. The deal is still under process. (Image: Reuters)

First Published on Mar 28, 2018 12:30 pm
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