Medium-sized pharmaceutical companies such as Elder
Pharmaceuticals, Ajanta Pharma and Glenmark are exploring
possibilities of acquiring well-known brands to increase
their portfolio in therapeutic segments. These companies
have already asked various merchant bankers to scout for
brands that would meet this strategy.
Says Elder Pharmaceuticals
director (international division) Alok Saxsena: "We
are in the process of expanding our therapeutic portfolio
into new segments like central nerve system and anti-diabetic.
Besides the process patent route, we are also planning
to go for the inorganic route. Merchant bankers are
approaching us with many proposals. But, no deal has
been finalised yet."
Says Ajanta Pharma
CEO Aravind K Agarwal: "We are looking for brands
that can provide a continuous bottomline growth to the
company. Though our merchant bankers had come up with
two-three brands, we could not acquire them due to the
high valuation quoted for these brands. The process
is still on."
Pharma has identified five main therapeutic segments
like neutraceuticals, opthamology, cardiovascular, anti-diabetic
and pain management as focus areas for growth and has
decided to acquire some fast-moving brands from these
segments. The company has asked ICCI Securities, SBI
Caps and KPMG to scout for brands in the same segments.
Pharmaceuticals executive director Glenn Saldanha: "Our
brand acquisition will depend on the valuation of the
brand. It should suit our portfolio, too. But we do
not have any immediate plans to go for brand acquisition
as we are now concentrating on US expansion." But
sources close to the company say Glenmark is actively
scouting for brands in the cardiovascular segment.
had acquired three brands Alex (for dry cough),
Flucort (a topical steroid) and Sensur (an ointment
to treat pain) from Mumbai-based Lyka Laboratories
for Rs 34.25 crore in 2000. The acquisition was entirely
funded via a term-loan from ICICI.
say due to the high valuations quoted by the seller
companies for their brands, no big deals are taking
place in the brand acquisition market. "Some of
the pharma companies that had put their brands for sale
around two years back have dropped their plans because
of the high valuation quoted by them."