Who are the potential buyers? Thus far, price is the primary obstacle holding back suitors such as Teva, Merck KGa, Boerhinger Ingelheim, Pfizer, and GlaxoSmithKline.
Who's a possible target? There are several well-positioned Indian firms that have healthy cash flows and strong drug pipelines. Cipla, Glenmark, Torrent, Claris Lifesciences, Zydus, Strides, Aurobindo, and Dr. Reddy’s have already teamed up with Western pharma companies. For most, more than 50% of their revenue comes from overseas markets
Says Y.K. Hamied, chairman of Mumbai-headquartered Cipla. “It all depends on what is available. Buyers are willing to pay a handsome premium for available assets,” he says. Cipla grew nearly 15% between May 2009 and April 2010. So, is Cipla for sale? He guffaws. “Cipla is never going to be sold,” he asserts.
One must keep in mind that Ajay Piramal of Piramal Healthcare had a similar position before bailing out his generic-drug business to Abbott. The Piramal group is using part of Abbott’s $3.7-billion in proceeds to bring to market the country’s first domestically developed drug by 2012. As for the other Indian-based firms, only time will tell how long they hold out before jumping to a multinational partnership or merger.
Posted by Bruce Lehr March 9th 2011.