Booster Shots

Indian pharmaceutical companies go on a buying spree to cut their risks by diversifying their portfolios and widening their revenue bases.

- Munish Shekhavat

Home-grown drug companies are on an acquisition spree.They are also inking agreements with their global peers. These moves by domestic pharmaceutical companies are aimed at diversifying their product portfolios to consolidate their businesses across the globe.

Hyderabad-based Dr Reddy's Laboratories recently inked a pact with Teva Pharmaceutical and an affiliate of Allergan to buy a portfolio of eight abbreviated new drug applications (ANDAs) in the US for $350 million (around Rs 2,300 crore) in cash. On the other hand, Mumbai-head- quartered Cipla sealed a deal with Russia's National Immunobiological Company (NACIMBIO) recently to collaborate on HIV and Hepatitis C drugs, entailing an investment of 2.8 billion roubles (about Rs 289 crore). Besides, the Zydus Group also recently acquired two ANDAs from Teva for an undisclosed amount.

"As pharmaceutical companies globally look at consolidating in some way or the other, Indian pharmaceutical companies would do well to negotiate the new pharmaceutical landscape. It will also provide them the opportunity to actually benefit from spin-offs," opines Novartis India Vice- Chairman and MD Ranjit Shahani.

Shopping spree

Dr Reddy's is buying a portfolio that consists of products that are being divested by Teva as a precondition to its closing of the acquisition of Allergan's generics business. The portfolio being acquired is a mix of ANDAs filed and pending approval and an approved ANDA. The acquisition is comprised of complex generic products across diverse dosage forms, according to a statement of Dr Reddy's Laboratories.