India-based Piramal has just announced its third healthcare buyout this year, paying $155 million up front for a clutch of anesthesia and pain management drugs from Johnson & Johnson.
The deal gives Piramal a bigger presence in the $20 billion market for generic injectable drugs, which are generally insulated from the intense competition and pricing pressure that affects their oral counterparts. And four of the five drugs are opioid painkillers, controlled substances that are tough to get approved and so face fewer rivals in the marketplace.
The Indian company gets all technical and marketing rights to the drugs, although J&J's Janssen division will manufacture them for at least three years. Another $20 million payment is in the cards if the products meet sales targets over the next 30 months.
In 2010, Piramal offloaded the bulk of its Indian pharmaceutical formulations business to Abbott Laboratories in a $3.7 billion deal, agreeing not to make generics for sale in India or in other emerging markets for eight years, and diversifying into other sectors including financial services and real estate. But that has not stopped the company from beefing up its healthcare operations elsewhere. The following year, the firm said it was setting aside a $1.5 billion war chest to buy up pharma businesses in other markets, particularly the U.S. and Europe.
Now, the Janssen deal brings Piramal's tally of healthcare-related acquisitions to 6 in two years, with a total investment of almost $270 million.
Most recently, it augmented its ingredients business with the $53 million purchase of U.S. company Ash Stevens, a specialist in high-potency compounds. In May, it announced a $16.5 million deal to buy four over-the-counter drug brands sold by Pfizer in India, adding to two other consumer health acquisitions--baby-care company Little's and five Organon/Merck & Co. OTC products--in 2015.
"Healthcare is an important focus area for Piramal…and we are strongly committed to growing this segment," said the company's chairman Ajay Piramal in a statement, pointing out that the business has grown 17% over the last five years.
"This acquisition is an important step in enabling Piramal to start to address the global generic injectable hospital drug market," he added.
Piramal is certainly not alone among Indian pharma companies in taking the acquisition route to international expansion. Others include Intas Pharmaceuticals, which just announced a deal to buy a portfolio of generic drugs sold in the U.K. and Ireland--along with a manufacturing facility--from Teva for almost $770 million.
Meanwhile, Lupin Pharmaceuticals agreed to buy two New Jersey generics companies in July for a total of almost $900 million, while Cipla absorbed InvaGen Pharmaceuticals for $550 million last year.
India's Intas buys U.K. business and plant Teva is unloading
Lupin finishes Gavis buy, giving it U.S. manufacturing beachhead
Cipla gets first U.S. manufacturing plant with InvaGen buy
India's Piramal buys another U.S. manufacturer
Abbott captures Piramal in $3.7B deal