Piramal buys US co's drug portfolio for USD 171 million

Viswanath PillaMoneycontrol BureauPiramal Enterprises on Monday said its UK-based critical care subsidiary entered into an agreement to acquire a portfolio of spasticity and pain management drugs from US-based Mallinckrodt for USD 171 million in an all-cash deal.Piramal will also pay an additional USD 32 million – depending on financial performance of the acquired assets over the next 3 years.The portfolio acquired includes Gablofen (baclofen) and two other pain management products which are currently under development. Gablofen is used in the treatment of severe spasticity or muscle contraction, which is currently marketed in the US and also has been approved for launch in 8 European markets.In the 12 months ended September, the acquired portfolio generated revenues of USD 44.6 million.The company said revenues from the acquisition will start contributing from the first quarter of FY18.“This transaction is a step further in our strategy to make investments, in both internal developments and acquisitions, to expand our presence in the global generic hospital drug market, which is greater than USD 20 billion in size,” said Ajay Piramal, Chairman of Piramal.“Through this strategy, our focus continues to be the creation of long-term value for shareholders,” Ajay Piramal added.Piramal said the acquired products have a high EBITDA margins, and the margins will be further maximized leveraging the sales and distribution network of Piramal in US.The latest acquisition will be the seventh acquisition by Piramal in the last two years. The company has so far invested Rs 3000 crore on its inorganic growth primarily shopping for manufacturing facilities, pharma products and over-the-counter (OTC) brands.Piramal is trying to reinvent its business after it sold its domestic formulations business to US-based Abbott in 2010 for USD 3.8 billion. Despite its aggressive push into financial services, the pharma business still continues to generate close to about three-fifths of company’s business contributing about Rs 3,558 crore in FY17 growing at average 17 percent in the last five years. The acquisitions will help the pharmaceutical business to grow at compounded annual growth rate (CAGR) of 23 percent, Ajay Piramal said. The company’s pharmaceutical business includes contract research and manufacturing services, critical care and OTC care.The UK critical care unit clocked revenue of Rs 876 crore, which is 13 percent of the company’s Rs 6,610 crore revenue in year ended March 2016. Piramal has been building niche product pipeline in critical care that includes inhalation and injectable anesthesia.Shares of gained 0.12 percent and were trading at Rs 1722.85 on BSE, while the benchmark Sensex dropped 0.13 percent to 27,845.43 points.