Wednesday, December 05, 2007


Pharma Acquisitions

Reeba Zachariah

Mark Saldanha, the low-profile brother of Glenmark Pharmaceuticals' MD & CEO Glenn Saldanha, is looking to acquire an European over-the-counter company, in a bid to grow his empire under Marksans Pharma.

A source in the know-how said Marksans Pharma is looking to buy a UK-based OTC firm and is currently doing the due diligence of the firm. The company has a manufacturing facility located in north of England and has some 40 to 50 brands in its kitty. The acquisition, if successful, will give a major fillip to Marksans' turnover of Rs 250 crore and a foray into the branded products category.

Apart from brands, it can also leverage on the foreign company's distribution network in Europe. It is learnt that London-based boutique investment banking firm Elara Capital is involved in the transaction.

The name of the foreign company could not be ascertained; the source added that Marksans is the frontrunner for the deal, which is expected to be completed by the end of January. Marksans plans to fund the acquisition through a mix of internal accruals and debt. For Marksans, the UK-acquisition would be a large transaction in its portfolio. Last year it acquired majority interests in Australia's Nova Pharmaceuticals.

It already caters to UK market through exports of OTC and prescription products. Mark Saldanha could not be reached for comment. An executive from Marksans said, "We are looking at acquisitions as part of our strategy of inorganic growth." The international business contributes 30-35% to the Mumbai-based Marksans' revenue.

Marksans Pharma came into being following the amalgamation of Glenmark Laboratories with Tasc Pharmaceuticals in August 2005. Mark took control over Glenmark Laboratories which was formerly a part of Glenmark Pharmaceuticals in 2003.

Glenmark Lab was later merged with the Tasc, an entity listed on the bourses. The merged company was then renamed as Marksans Pharma, which has a presence in active pharmaceutical ingredients and formulations.

Marksans Pharma, according to the company website, is the second largest producer of Ciprofloxacin, an antibiotic to treat or prevent infections caused by bacteria and Ranitidine, a drug for ulcers in India. Mark Saldanha holds about 49.59% stake in Marksans.

Nicholas Piramal Ltd, the Indian drugmaker that’s developing cancer treatments with Merck & Co, plans to spend as much as $500 million buying an overseas drug manufacturer to boost profits.

"We are quite big in contract manufacturing, so that’s the vertical we will look at," Ajay Piramal, chairman of Nicholas Piramal, said in an interview in New Delhi, where he was attending the World Economic Forum’s India economic summit. He declined to name target companies. "We have sufficient funds but we can raise more if the need arises."

Indian drugmakers led by Dr Reddy’s Laboratories Ltd and Ranbaxy Laboratories Ltd are seeking acquisitions in the US and Europe to gain sales teams and products. The biggest gain in the rupee in more than three decades is lowering the cost for Indian companies to buy overseas rivals.

The US and Europe’s five biggest drug markets of Germany, France, the UK, Italy and Spain had retail pharmaceutical sales of $306.3 billion in the 12 months to July, according to research company IMS Health.

The Mumbai-based drugmaker expects to boost the operating margin to 19% in the year to March 31 from 15.5% because of a turnaround in its overseas contract manufacturing business. Separating its research and development unit will also lower costs, he said.

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