Torrent Pharmaceuticals is understood to be shopping for a pharmaceutical company in Germany. Cadila Healthcare, too, has set off for Italy with a shopping basket in hand.
That's not all. Ranbaxy Laboratories, Wockhardt, Lupin, or mid-sized drug-makers like Glenmark Pharmaceuticals, Orchid Chemicals and Pharmaceuticals and Unichem Laboratories are eyeing acquisitions overseas.
That list tops a series of earlier acquisitions by India's thriving phamaceuticals industry. Wockhardt acquired Germany-based Esparma GmbH for $11million early this year, the third company it bought in the West after Wallis Laboratories in 1998 and CP Pharmaceuticals, both in the UK, in 2003.
Also this year, Dr Reddy's acquired US-based Trigenesis Therapeutics Inc, a dermatology company. Again, early this year, Ranbaxy Laboratories acquired Aventis' generic arm, RPG (Aventis), in France.
Meanwhile, Glenmark Pharmaceuticals bought Brazil's Laboratories Klinger. Zydus Cadila acquired the formulations business of Alpharma of France for euro 5.5 million some months ago.
Just name any Indian pharmaceutical company and you will find that it is looking for acquisitions abroad, primarily in Europe and the US. So what's new here? Pharmaceutical companies have been scouting around for overseas
What explains the current rush to buy companies overseas? Explains Ajay Piramal, chairman of Nicholas Piramal India, "There are fewer quality acquisition opportunities currently in the Indian market."
Piramal points out that asking prices here are too high. He says he expects significant consolidation to take place in India over the next two or three years, only by then will the price tags be cut.
Secondly, most companies that are on the prowl overseas, are bulk drug producers. They are seeking European companies with a good product pipeline.
Quite simply, Indian drug makers are gearing up to capture the world generic market because drugs with sales worth $40 billion are going off patent in the next three years.
"Acquisitions in the US and Europe will enable Indian companies to establish a toehold in these geographies. The global generic drug market is growing rapidly. It is the most lucrative market. Around 50 per cent of all US prescriptions comprise generic drugs," says an analyst.
Still, some pharmaceutical industry insiders see this overseas buying binge as mindless. Taking a swipe at a rival, Lupin Chairman Desh Bandhu Gupta says it makes no sense to buy just any company in Europe.
"Several acquisition targets are currently available in Europe. A meaningful acquisition is, however, not available for less than Rs 100 crore (Rs 1 billion)," sniffs Gupta.
