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Ranbaxy eyes US pharma company

Mar 3, 2000

Ranbaxy has mandated investment bankers Warburg Dillion Read and Rabo Bank to scout for international acquisitions preferably in the USA. Ranbaxy is among the top Indian pharmaceutical companies and ranks second in terms of domestic sales. It has interests in anti–infectives, respiratory and cardiovascular. It possesses 12 brands among the top 250 brands in the country and in terms of its therapeutic dosage offerings covers around 77% of the market.

The companies that are being talked about in this context are Sidmak Laboratories (which was earlier rumoured to be taken over by Wockhardt) and Schein Pharma. Both of these are players in the US generic markets and have distribution networks in place.

With almost $32 bn worth of drugs going off patent (more than 5 times the Indian market) in the USA, top Indian pharma companies are focusing on the US generic market to drive topline growth. Bottomline performance in this market is critically dependent on the time to the market. This is so since within the first two years prices of generic drugs drop almost 80%. Hence it is the first two entrants which make money on the introduction of a new drug in the generic market.

Also any company catering to the generic market needs to have a distribution network in place and it is for these reason that the Indian pharma companies such as Ranbaxy are looking at acquiring companies or putting in place alliances with the US based generic companies359

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