Ranbaxy Laboratories hasn't delivered enough of Indian pharma to its majority owner, Daiichi Sankyo. The Japanese drugmaker is once again kicking tires in India, The Economic Times reports, almost four years after striking its multibillion-dollar deal for 64% of Ranbaxy.
According to the ET, Daiichi is shopping for companies with about $60 million to $100 million in annual revenues. Three companies have caught the company's eye, with products ranging from diabetes drugs to women's health treatments. "Daiichi is looking to expand in the Indian market, and it believes that an acquisition of a company or specific brands will help it gain significant market share," one ET source said.
Daiichi's investment in Ranbaxy hasn't turned out the way any acquirer would have planned. Soon after the deal closed in 2008, U.S. regulators barred 30 Ranbaxy products and ramped up an investigation into manufacturing problems and data-tampering. The dispute with the FDA continued until just recently, when Ranbaxy entered into a consent decree that includes some strict requirements for changes at its problem plants. Acknowledging the ongoing Ranbaxy losses, Daiichi executives recently took hefty pay cuts.
One bright spot for Ranbaxy, however, has been its domestic growth, which outpaced its peers last year. But the company has some holes in its product line-up, analysts told the ET, and so Daiichi's desire to beef up those therapeutic areas makes sense, as does its desire for a deal much smaller than its Ranbaxy buyout.