Emerging Markets
Mid-2008, India’s wily predator, Ranbaxy Laboratories, turned prey in its
deal with Japan’s Daiichi Sankyo. Anju Ghangurde gauges the temperature
for more transactions on India’s deal street
always had to handle price interventions, Mr Shah of Mehta Partners said that the the globe, as pharma majors increasingly
competition, regulatory vigilance, etc. It’s acquisition comes with “zero overlapping recognise the significance of pursuing a
Ranbaxy that has been in a peculiar situation assets” adding that all assets are valuable for two-fold strategy of “dual revenue channels”
with the FDA for the past two years or so,” both parties. “However, execution is the key from generic and patented products.
said one official who declined to be in every design. The architecture and “This is a validation of the fact that
identified. Ranbaxy is currently facing rationale is well thought out and sound and Glenmark had seen the change coming and
increased regulatory vigilance across the we are confident that the implementation bifurcated its operations into two business
world after the US FDA issued warning will be equally effective,” Mr Shah said. models – one that will pursue the pure
letters for GMP deviations at the company’s Takashi Shoda, Daiichi Sankyo’s president generics business and the other focused on
Indian plants in Paonta Sahib and Dewas. and CEO, had earlier said that the deal innovation/branded generics,” said Glenn
The agency has since issued an import alert provides the opportunity to complement his Saldanha, managing director and CEO of
for about 30 of Ranbaxy’s products citing
company’s strong presence in innovation Glenmark. However, he admits that the
GMP concerns. The company is also being
with a “new, strong presence in the fast re-organisation was a “plucky” move and
investigated for alleged fabrication of data
growing business of non-proprietary that the company faces a path “strewn with
for its generics to the FDA.
pharmaceuticals”. It also gives Daiichi Sankyo challenges”.
There is, however, no denying that it was
access to low-cost R&D and manufacturing But with fewer NCEs and NBEs actually
a cool deal for Malvinder Mohan Singh,
in India and an opportunity to access making it to market, there could be more
Ranbaxy’s CEO and part of the founding
Ranbaxy’s expertise in drug delivery. firms that opt for the hybrid model
family, who took home about Rs100 billion
There is significant domestic support for straddling both discovery R&D and the
($2.4 billion) for divesting a 34.8% stake in
the hybrid model; after all most Indian generics business.
the company. Some of the money is
companies were originally pure generic firms Mr Shah of the IPA explained said that
expected to be used to finance growth
and have for some years been focusing on since emerging markets are set to drive
plans at Religare and Fortis, the group’s
discovery research. Several leading Indian future growth, most innovator companies
interests in the financial services and
players have spun off discovery research are bound to look at these regions
hospitals segments respectively.
into separate entities, given the differences aggressively. “Generic companies will be
in risk profile, timeframes to market and partnered or acquired by big pharma to
odd couple resource requirements of this business maintain their toplines,” he said. Similar
To many, Ranbaxy and the staid Tokyo-based strategy compared with the generics model. views were aired at the Generic
innovator, Daiichi Sankyo, make an odd Glenmark Pharmaceuticals of India believes Pharmaceutical Association’s recent annual
couple, but this hybrid combination clearly the acquisition by Daiichii Sankyo serves as policy meeting, where some experts said
has its own advantages. “a cue” for a trend of consolidation across that big pharma companies were chasing
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