Contract research in India has seen a boost that, along with other green shoots news, has lifted the tone for an industry that has run through a rough patch of regulator and civil society scrutiny over claims of poor management and allegations of a disregard for patient safety and informed consent.
The Business Standard, citing data from Venture Intelligence, said there were 8 M&A transactions involving pure-play contract research firms between January 2014 and May 2015, compared with only 5 deals in the three years prior to 2014. The consolidation is seen as healthy.
According to the newspaper, the value of transactions in M&A is not available in most cases, but two deals are known: Inogent-GVK Biosciences' buyout of Daiichi Sankyo's 6.12% voting rights for INR 89.7 million ($1.47 million) in July 2014 and the Sristek Clinical Research Solutions-Indovation Technologies deal in October 2014 for INR10 million ($1.64 million).
Business Standard said that Sequoia Capital India-backed GVK Bio was also a buyer domestically, acquiring Vanta Bioscience.
However, healthcare providers Max India and Fortis Hospitals sold their contract-research arms in the past year, the newspaper said, adding that Max Neeman Medical International was bought by Canada-based JSS Medical Research and Fortis Clinical Research was sold to India's Quest Life Sciences.
Buyers from abroad included Parexel International, picking up Quantum Solutions India, while Par Pharmaceutical bought Ethics Biolabs. Other noted deals were Indovation Technologies buying Sristek Clinical Research Solutions and the sale of Karmic Lifesciences to Cliantha Research.
Also on the bright side, this month India's Foreign Investment Promotion Board hiked the foreign investment limit allowed for an upcoming initial public offering of shares in Syngene International, the CRO unit of Bangalore-based Biocon, setting the stage for a capital market entry expected in July.
And a deal by Sweden's Medivir this month has thrown a bit of support to CRO GVK Biosciences, which faces a European Medicines Agency recommendation for the suspension of more than 700 products tied to its facility in India.
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| Quest Life Sciences managing director T.S. Jaishankar |
T.S. Jaishankar, managing director of Quest Life Sciences, told the newspaper that things might be looking up.
"The industry faced a challenge earlier since there were a lot of negative reports from the media and protests from the non-government organizations about the quality standards of the clinical trials," he was quoted as saying by Business Standard. "However, the health ministry and the Drug Controller General of India have taken proper steps to put the standards in place to bring back the industry."
- here's the Business Standard story
- visit the website of Venture Intelligence