M&A in Turkey, Indonesia underscore emerging-markets lure

Given the measly growth projections for U.S. and Europe, it's no surprise that expansion-minded drugmakers are looking eastward. While a flock of major pharma companies is circling Turkey's MN Pharma, Indonesia's homegrown Kalbe Farma is looking for deals in its own backyard, Reuters reports.

In both cases, the impetus is increased spending on healthcare. Both Turkey and Indonesia are among IMS Health's 17 "pharmerging markets," and though pharma growth there isn't expected to reach Chinese or Indian levels, the research firm expects double-digit increases through 2015.

MN Pharma has been on the block for a while; almost everyone who's anyone in pharma has taken a look at the injectables maker. According to Reuters, GlaxoSmithKline ($GSK), Pfizer ($PFE), Fresenius, Merck ($MRK), Abbott Laboratories ($ABT), Mylan ($MYL), Eli Lilly ($LLY) and Amgen ($AMGN) have checked out the business, formally known as Mustafa Nevzat Ilac Sanayi. Lilly has bowed out already, Reuters says, and sources tell the news service that Mylan, Abbott and Amgen may have dropped out as well. Five companies will move into the second round of bidding. One source said that GSK appears especially interested; the company did say in January that it's looking for deals in Turkey.

Meanwhile, Kalbe Pharma is in talks with 5 to 8 pharma companies in Indonesia, an executive told Reuters, as it aims to build up its consumer health and nutritionals businesses in its home market. Kalbe is the biggest drugmaker in Southeast Asia, and it has some $200 million in the bank to help finance deals. The company also plans to launch 15 to 20 new products this year, most of them prescription drugs. "We are engaged in discussions, but we can't make any projection on successful merger-and-acquisition activity for now," Kalbe's managing director told the news service. "M&A is challenging, especially in terms of finding the proper target to be acquired and getting the right valuation."

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