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This financial year is expected to be a bonanza for most pharma companies |
This last financial year will be remembered as one in which the Indian pharma industry emerged as a global force to reckon with, mainly on the strength of some notable acquisition and its rising research capability.
The year, which brought the intellectual property regime (IPR) back in the sector, also saw the largest overseas acquisition in the Indian pharma space- Dr. Reddy Lab's Rs. 2600 crore ($362 million) buyout of German generic company Betapharm, and a number of very important crossborder R&D and service outsourcing alliances.
The one dampener was that the financial results were not uniformly good. While companies such as DRL, Lupin, Sun Pharma, Cipla, Aurobindo and Orchid did very well, recording an average increase of over 50 per cent in net profit and above 25 per cent in turnover, others disappointed. For instance, Ranbaxy Laboratories and Nicholas Piramal ended up posting zero growth in net profits.
Fortunately, the tide seems to have turned a little and this financial year is turning out to be a bonanza for most companies. The trend continued this financial year with lot more international deals and also with individual companies financial performance during the two consecutive quarters. The rapid rise in investments, indigenous as well as foreign, helped matters further. During the first half of the financial year 2006-07, half a dozen multinationals, including MSD, Altana Pharma, Mylan, Merieux Alliance, set up shop in India with a total investment of about $ 1.2 billion. "India has just started exploring the over $57 billion worth world generies market. The country's share, which is currently around 14 per cent in this huge market, will be about 50 per cent by 2010," says Dilip G Shah, secretary general, Indian Pharmaceutical Alliance (IPA).
Indian Pharma inc, which has completed more M&As in the first six months of the current financial year compared to those in the whole year of 2005, has also seen growing interest among investment bankers and venture fund companies. Several global and domestic investment institutions and banks have now earmarked investment options for this emerging industry in India. Sanjiv Kaul, director, ChrysCapital, said biopharmaceuticals and late stage R&D ventures in India are bound to attract significant investments from both Indian and foreign private equity companies." |
