AbbVie's acquisition of Allergan is likely to have a negligible impact in the Indian market
The relative calm in the mergers and acquisition space of the pharmaceuticals sector was snapped by the big announcement of AbbVie acquiring Allergan for $63 billion.
The marriage will create an entity with expected sales of $48 billion in 2019.
AbbVie is known for Humira and Allergan makes much of its money from Botox and Retasis.
Humira, a biologic used in treatment of various autoimmune diseases, is the world's top selling drug. It is also the single largest source of revenue for the company. Humira raked in more than $20 billion in sales in 2018 alone. It is under threat from generics. The generics or biosimilars indicated for rheumatoid arthritis treatment have entered Europe. In US, AbbVie was able to delay the launch of biosimilar through settlements until 2023.
As many as eight companies, including Mylan-Biocon, have now settled with AbbVie over Humira biosimilars. The conditions of these settlement agreements have not been disclosed.
But Humira going off-patent sooner or later, analysts' tracking AbbVie have expressed concern about what holds the company's future. The answer seems to be Allergan.
Allergan is the Dublin, Ireland-headquartered, maker of Botox. It is a famous anti-ageing cosmetic drug that keeps wrinkles forming on the forehead. Retasis not spoken with same breath as Botox, but is a blockbuster with sales of over $1.2 billion. The sales of this cyclosporin eye drops is rising as more people hooked to their smartphone screens are at risk to develop dry eyes. Both Botox and Retasis too face competitor from generics.
The deal got mixed response from the Wall Street, on concerns over the price AbbVie is paying, also the deal is seen as an attempt to preserve sales, as the innovation pipeline looks thin and companies are struggling to churn out blockbuster drugs.
What it means for India
From the Indian perspective, the deal will have very negligible impact as both AbbVie and Allergan are not listed entities.
India is flush with Humira biosimilars, so there is not much upside there.
But Allergan has sizable presence in India. It has a joint venture partnership with Piramal, spanning over two decades. Allergan is a leader in the eye care segment, with some 35 products treating diseases such as glaucoma, dry eye, infections and inflammations.Allergan Healthcare, which is a 100 percent subsidiary, markets Botox and Juvederm in India. Allergan India's aesthetics business is growing at 60 percent because of the growing awareness among people to look young and rejuvenated.The Great Diwali Discount!
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