Hyderabad: Aptuit Inc., a US contract-drug development firm that bought an undisclosed majority stake in Hyderabad‘s Laurus Labs Ltd last month, is eyeing two international acquisitions, the first of which could cost up to $200 million (over Rs800 crore), to expand the range of its drug discovery services to biotechnology and pharmaceutical firms.
The Greenwich, Connecticut-based firm had acquired seven companies globally in the last couple of years, of which two are from India. The first Indian acquisition was InfoPro Solutions, a bio-informatics company from Bangalore.
Frank J. Wright, Aptuit’s vice-chairman and co-founder, said the next acquisition of Aptuit would be in Europe, where it currently lacks capabilities in molecule development for chemical ingredients that go into pharmaceuticals. The deal could be concluded in three months, Wright said, adding the buyout could be either in the UK, Germany or Switzerland.
Aptuit has access to funds of $750 million pumped in by some of the world’s largest private equity investors such as Welsh, Carson, Anderson & Stowe and Temasek Holdings.
Wright said there are few more gaps in the chain of drug discovery services that Aptuit offers now and this would drive a buyout in the US. For instance, he said, Mylan does “not have a preclinical services facility consisting of pharmacology and toxicology capabilities in North America,” which will be acquired.
An analyst said a dearth of talent in the US and Europe was driving work in the pharmaceutical industry to India. “Many of the global pharma MNCs are either offshoring their research needs to Indian companies, which have expertise in the contract research and manufacturing, or setting up their research base in India,” Dev Jyoti, an analyst with Global Absolute Pvt. Ltd, a Gurgaon-based brokerage said. “The interest shown by global majors are primarily due to availability of good quality talent pool (research scientists) and low costs.”
Further, Aptuit does not have large-scale steroid capability and plans to build a manufacturing facility in India, which will shortly firm up the investment size and location. Aptuit acquisitions in India will be routed through Aptuit Laurus, a new joint venture (JV) between Aptuit and Laurus Labs, chief executive of new venture Satyanarayana Chava said. “While Aptuit has committed to infuse over $100 million into the JV, we expect the JV to generate another $100 million cash in the next five years,” Chava said.