iramal Enterprises Ltd on Monday said its British unit Piramal Critical Care Inc. will buy five anaesthesia and pain management drugs from Belgian drugmaker Janssen Pharmaceutica NV in an all-cash deal.
Apart from an upfront payment of $155 million, Janssen Pharma will receive up to $20 million more if the product portfolio achieves certain agreed financial milestones over the next 30 months.
Piramal Critical Care will buy injectable versions of Sublimaze (fentanyl citrate), Sufenta (sufentanil citrate), Rapifen (alfentanil hydrochloride), Dipidolor (piritramide) and Hypnomidate (etomidate), the company said in a statement to stock exchanges.
Piramal said the five brands will add 33%, or $45 million (Rs289 crore), worth of sales to critical care division of Piramal The UK unit clocked revenue of Rs876 crore, which is 13% of the company’s Rs6,610 crore revenue in year ended March.
Piramal said it has agreed to acquire the brand names and all related intellectual property (IP) associated with the products, including the knowhow to make both the active pharmaceutical ingredients (API) and the final products.
The products are currently sold in over 50 countries.
“The potential acquisition does not include the transfer of any manufacturing facilities or employees,” Piramal said. “As part of the transaction, Janssen will continue to supply finished dosage forms for up to three years and API for up to five years.” Janssen will continue to sell the products on behalf of Piramal until the marketing authorizations or relevant business relations are transferred to Piramal. The firm expects to close the deal this week.
“Healthcare is an important focus area for Piramal Enterprises, and we are strongly committed to growing this segment,” said Ajay Piramal, chairman of Piramal Enterprises, in a statement.
He said the latest acquisition was the sixth healthcare buyout in last two years, and the firm has invested Rs.1,800 crore on acquisitions across its healthcare businesses. “This acquisition is an important step in enabling Piramal Critical Care to start to address the global generic injectable hospital drug market which is greater than $20 billion in size,” he said.
“Once the business is fully transitioned to us, our customers and business partners will benefit from our broader product basket, and in turn we can grow value of the acquired product portfolio through our team’s focused sales and marketing efforts,” said Peter DeYoung, chief executive officer of Piramal Critical Care, adding that the firm is committed to pursuing additional value enhancing organic and inorganic opportunities. The company said four of the acquired products are controlled substances which have higher barriers to entry.
On Monday, Piramal Enterprises shares fell 1.01% to Rs1,836.00 on the BSE, while benchmark Sensex index rose 0.08% to 28,082.34 points.