Abbott Pays $3.7 Billion for Indian Pharmaceutical Company – Primal Healthcare Does Generics and Outsourcing
Posted May 21 2010 12:26pm
As this article states, this will give Abbott 7% of the market share in India. We are seeing more big pharma moves in the area of purchasing or investing in generic drug companies. The development of drugs outside the US is different and not as stringent in some areas, thus we are starting to see more companies flourish outside of the US. The company like many others is not restricted to just manufacturing in India though as they have presences in other countries as well.
As mentioned in previous posts, portfolios are changing quite a bit today and no exception here either as the company also makes glass and invests in real estate, which might come in handy when looking for the next place to build a factory as an example. BD
NEW DELHI — Abbott Laboratories said Friday that it would purchase the Indian drug maker Piramal Healthcare for $3.7 billion, increasing its presence in the fast-growing emerging markets and its portfolio of low-priced drugs.
Piramal, based in Mumbai, makes generic and branded drugs in nine plants in India, Britain and Canada, and has the largest sales force in India with more than 6,000 representatives. The company’s net profit increased 52 percent in the last fiscal year, to 4.8 billion rupees ($103 million).
Abbott said Friday that it would pay $2.12 billion in cash upfront for Piramal, and then $400 million annually over the next four years. The deal will add immediately to Abbott’s earnings, executives said.
The pharmaceutical business in emerging markets is profoundly different from the West. Consumers in emerging markets often pay directly for their prescriptions, rather than relying on insurance or government care, and generic drugs are the biggest sellers.
Piramal is part of a conglomerate that also makes glass and invests in real estate. The drug company, which is nearly 50 percent owned by the conglomerate’s founding family, has done 15 acquisitions since 1988, including a deal for the British division of Rhodia and Pfizer’s manufacturing facility in northeast England.