Pharma M&As to drive Infosys' life sciences biz

Infosys, India’s second largest software services company, expects the recent spate of mergers and acquisitions in the global pharmaceutical sector to boost its life sciences business over the next 12 months.

“There is a lot of M&A activity happening in the life sciences space.

"When M&A is typically initiated, budgets are tightly controlled, because companies are hoarding cash to ward off (rival bids) and to make the sale happen,” said Manish Tandon, senior vice-president and global segment head of life sciences.

“As these M&As are fructified in the next six months to a year, a lot of new work will be generated. We are confident we will get a lot of business there.”

In April, Swiss drug maker Novartis announced a multi-billion dollar revamp.

As part of it, the company swapped assets with GlaxoSmithKline and sold its animal health arm to simplify business and increase focus on high-margin cancer medicines.

In India, Sun Pharmaceutical Industries bought Ranbaxy Laboratories in a $4-billion transaction, making the combined entity the world’s fifth-largest generic drug maker by sales.

Pfizer tried to buy the UK’s second largest pharmaceutical company, AstraZeneca, but the deal did not come through.

Life sciences makes for nearly five per cent of Infosys’ revenue and till recently, it was part of the company’s

retail and life sciences business segment that comprised retail and consumer packaged goods, transport and logistics, life sciences and health care.

The combined segment grew 3.4 per cent in October-December 2013 over the previous quarter but shrank 3.5 per cent in January-March.

“In the third quarter (of FY14), life sciences grew around 9.5 per cent quarter-on-quarter, by far the largest growth in any segment,” Tandon said.

“When you grow that fast in one quarter, you are relatively muted in the next quarter, and that's how we were.

"This quarter (April-June), we will hopefully do better.”

Infosys on Wednesday launched a cloud-based version of its Clinical Trial Supply Management solution.

The software helps life sciences companies enhance efficiency of clinical trial processes by driving greater collaboration between pharmaceutical companies and contract research organisations, the company said.

Infosys, so far selling the on-premise version of CTSM to large pharmaceutical companies, will now be able to target mid-size (less than $5 billion in revenue) companies with this cloud-based version.

“This (cloud-based version) is particularly targeted towards mid-size companies, which do not do so many trials and so, on-premise does not make sense for them,” Tandon said.