But besides the big bang Sun Pharma-Ranbaxy deal, the first fortnight of FY2016 had some smaller but interesting deals, as companies chose different ways to counter the headwinds. Dr Reddy Laboratories’ decision to acquire UCB’s existing brand equity within India in three high growth areas — dermatology, respiratory and paediatrics diseases, — will further expand its therapy footprint, as well as add to the bottomline, considering that these businesses clocked approximate revenues of Rs 150 crores in CY2014.
The accent on assets and brands continued with the two other deals announced in early April. Indoco Remedies’ acquisition of Piramal Clinical Research, the Hyderabad-based clinical research division of Piramal Enterprises and Quest Life Sciences’ acquisition of Fortis Clinical Research Ltd (FCRL). Both deals give the acquirers quick growth in the clinical services sector, allowing Indoco to offer more depth to its clients while Quest gets a spurt to its growth plans.
These players are taking their cues from their global peers like Novartis. The company has sharpened its focus on key areas through a series of transactions in the past two years, culminating with last year’s three way asset swap with GSK and Eli Lilly. (See story, Bullish on India, pages 16-20). Though the Indian subsidiary took a hit in a key therapy area, oncology, when it lost the patent (and perception) battle for Glivec, Novartis India’s Vice Chairman & Managing Director, Ranjit Shahani is optimistic that Prime Minister Modi will make a difference on the policy front, given his industry-friendly image.
But these hopes may be shortlived. PM Modi is already facing internal opposition to his push for a national IPR policy. (See news story: Sangh Parivar affiliate pans draft IPR policy, page 12) Co-convenor of the Swadeshi Jagaran Manch Ashwani Mahajan’s blogpost is even more hard hitting, with the title ‘Don’t dilute Patent Act’ a fair warning of his stance. Seems like PM Modi will have to weather internal headwinds and hard-sell his vision to his party colleagues, yet again, before we see any signs of his promised achhe din.