Thaindian News

Mumbai, Sep 8 (IANS) Piramal Healthcare Wednesday announced it has concluded the first part of its $3.72-billion deal to sell its domestic formulations business to Illinois-based Abbott Healthcare.
In a regulatory filing with the Bombay Stock Exchange (BSE), Piramal Healthcare, which owned popular brands such as Phensedyl, Paraxin and Pentids, said the sale include 350 trademarks, as also its manufacturing facility at Baddi in Himachal Pradesh.

Abbott, which is celebrating its 100th year in India and owns such brands as Creamffin, Brufen and Digene, had agreed to make an upfront payment of $2.12 billion to the Ajay Piramal-led firm, apart from $400 million annually for four years.

Piramal group said it will retain its business of custom drug manufacturing for third parties, critical care, over-the-counter products, pharmaceutical ingredients, vitamin, diagnostic medical devices and clinical research.

“We are happy to see that our domestic formulations that we nurtured for 22 years now become a part of a value-driven company which assumes a leadership position in India,” said Piramal group chairman Ajay Piramal.

The transaction saw the scrip of Piramal Helthcare jump 3.05 percent on the exchange at Rs.526.

Abbott had estimated the growth of its pharmaceuticals business in India after the Piramal acquisition to touch 20 percent annually and log $2.5 billion by 2020. The Piramal group’s turnover across several business topped $1 billion in 2009-10.

Of this, Piramal’s portfolio of branded generics is expected to log sales of over $500 million, with brands spanning multiple therapeutic drugs and formulations, including antibiotics, respiratory, cardiovascular, pain and neuroscience.

The two firms estimate the sales of branded pharmaceuticals in India to touch $8 billion this year, making it one of the fastest-growing market in the world. The pharmaceuticals industry in India is the third largest in the world in terms of volumes.

As part of the deal, Piramal and its associates will also not engage in the business of generic pharmaceutical products in the finished form in India, nor will they market or manufacture products which are the part of the portfolio in emerging markets.

The combined Abbott and Piramal sales forces will be the industry’s largest in India, the two companies said. While Piramal’s healthcare business employs more than 5,000 people, Abbott has more than 2,500 employees in the country.