MUMBAI: In the resilient domestic pharmaceuticals sector, mergers and acquisitions (M&As) are not new. However, this year has stood out.
In 2022, there were 16 deals in the industry, the largest perhaps in a decade, worth nearly a billion dollars. Experts in the field believe that the volume could be higher. Strangely, these acquisitions have not been backed by foreign corporations. Local businesses have become aggressive acquirers, purchasing even multinational corporations' brands.
Significantly, private equity (PE) investors have backed the majority of pharma mergers and acquisitions.
Mankind Pharma's acquisition of Panacea's domestic formulation brands and Torrent's purchase of dermatology company Curatio Healthcare are two of the largest transactions (see graphic). The most deals in the industry this year were announced by Mumbai-based JB Pharma, which recently acquired Glenmark's cardiac brand Razel (Rosuvastatin and combinations) in India and Nepal. Torrent Pharma, which is based in Ahmedabad, has also been aggressive with deals.
“Large Indian players are doubling down on India as an appealing diversification from the beaten-up US generics market. As a result, we witnessed deals in which Indian businesses acquired brands from local sellers. According to Sujay Shetty, global health industries advisory leader at PwC India, "We see more of the same in 2023."
This fiscal, it is anticipated that the Indian pharmaceutical industry will expand by 8 to 10%. As of November, the organised pharma retail market worth Rs. 1,91,887 crore experienced total annual growth of 6%. According to data from the market research company IQVIA, the market expanded by 14% in November over the previous year.
Indian strategics have carried out the majority of mergers and acquisitions. In contrast, foreign formulation companies have been net sellers in the branded generic market. This is the result of their global portfolio rationalization, "said Quadria Capital partner Sunil Thakur.
In general, deal activity has increased as India Inc. has become more aggressive in its pursuit of overseas acquisitions. The YTD (year-to-date) 2022 arrangement volumes are comparable to YTD 2021. Then again, values saw a 47% increment," an investigation by Award Thornton Bharat said.