Takeda Wants To Buy A Big Indian Drugmaker

Takeda Wants To Buy A Big Indian Drugmaker

August 24th, 2011 // 12:37 pm @

In a bid to broaden its global reach, Takeda Pharmaceuticals is holding talks with two of India’s biggest drugmakers – Cipla and Lupin – both of which are large providers of generic meds, according to reports. The move underscores the ongoing desire among brand-name drugmakers to gain market share in the large Indian market as well as expand their product portfolios.

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Takeda, which earlier this year bought Nycomed for $13.6 billion, is talking to Lupin about buying its domestic formulations business and research facility, according to The Economic Times, although Lupin apparently wants a price that would amount to 17 times revenue, which last year reached $1.5 billion. The Japanese drugmaker has also approached Cipla, but talks were described as preliminary.

A Cipla spokeswoman denied any deal is under way. “We are not in talks with anyone either to sell our company or any of its brands,” she tells the paper. And a Lupin spokesperson declined to comment on “baseless market speculation.” Takeda did not respond to a request by the paper for comment.

The overture comes at a delicate moment for the Indian government, where some officials are concerned that the domestic pharmaceutical industry is being gobbled up by foreign drugmakers and that needed medicines for the poorest citizens may be priced out of their reach. Toward that end, a proposal was floated to cap foreign investment in domestic drugmakers (see this).

Expanding into India, of course, makes sense. The domestic market is one of the fastest-growing markets in the world and, as the paper notes, McKinsey consultants expects growth to reach $55 billion by 2020 from about $12 billion currently. Last year, Abbott Laboratories paid $3.7 billion for the Piramal Healthcare domestic drug formulation business. And Takeda needs to play catch up its rival, Daiichi Sankyo, which paid $3.6 billion for the troubled Ranbaxy Laboratories.

“This is a big market for global pharma giants,” Centrum Capital’s Ranjit Kapadia tells the paper, adding that Takeda last year named former Roche exec Shankar Suryanarayanan as head of its India office and announced growth near-term growth plans that included more deals. Cipla, by the way, is the second-largest generic maker in the country by market share, while Lupin is the fifth-largest player.

Source: Pharmalot

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