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It’s their second acquisition in about two months, but Nandini Piramal says there’s more to come in healthcare for Piramal Enterprises.
The company will “continue doing acquisitions” in all three healthcare segments (critical care, custom manufacturing and consumer products), the young Piramal told BusinessLine , after the company forged a $175 million deal to acquire five of Janssen’s injectible anesthesia and pain management products earlier this week.
In critical care, the company will look for niche opportunities in the United States and other western regions, while it will scout for brands in the consumer products and OTC (over the counter) segments in India, said Nandini, Executive Director with the company and daughter of Chairman Ajay Piramal and Dr Swati Piramal.
In mid-August, the company had acquired Michigan-based Ash Stevens Inc, a contract development and manufacturing organization (CDMO) for about $43 million (Rs 280 crore).
Explaining the Janssen acquisition, Piramal said, the addressable market for them was the $20 billion generic global injectible hospital products segment. And the recently acquired injectable versions of Janssen brands, Sublimaze (fentanyl citrate), Sufenta (sufentanil citrate), Rapifen (alfentanil hydrochloride), Dipidolor (piritramide), and Hypnomidate (etomidate) were being marketed in 50 countries including Europe, Japan and the emerging markets.
Besides, four of the five acquired products are controlled products and have limited competition in large markets as they are difficult to make, explains Peter DeYoung, Chief Executive with Piramal Critical Care.
The deal was executed through the company’s wholly-owned Critical Care subsidiary in the United Kingdom.
The transaction
The acquisition includes the brandnames and all IP (intellectual property) related to these products, including the know-how to make both the active pharmaceutical ingredients (API) and the finished dosage forms. However, it did not include the manufacturing facilities or employees.
Janssen would supply finished dosage forms for three years and API for up to five years. And Janssen would sell the products on behalf of Piramal until the marketing authorisations etc are transferred to Piramal.
The transaction is structured in two parts with an upfront $155 million payment and an additional $20 million on achieving certain financial milestones over the next 30 months. The deal is expected to be completed this week and the funds have been raised through a mix of internal accruals and debt, Piramal said.
The latest buy is Piramal Enterprises’ sixth healthcare acquisition in the last two years, and the company has invested inorganically about Rs 1,800 crores across this segment, said Chairman Ajay Piramal in a statement announcing the deal.
Critical care clocked revenues of Rs195 crores in the first three months (Q1) of the current financial year. In fact, healthcare accounted for 48 percent of Piramal Enterprises’ Rs 1,776 crore revenue in Q1 followed by financial services (36 percent), information management (15 percent) and others.
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