AHMEDABAD | Mumbai: Ahmedabad-based drug maker Torrent Pharmaceuticals is close to finalising a deal to acquire domestic women healthcare portfolio of Swiss pharmaceutical major Novartis in the country, people close to the development said.
“The total valuation of the deal would be around Rs 300 crore,” a person with knowledge of the matter told ET. “Novartis women healthcare portfolio had a turnover of about Rs 70 crore in India and the deal could be concluded within next eight weeks,” the person said.
Another person having knowledge about the deal said the two firms have already signed a business transfer agreement (BTA). Email queries sent to Torrent and Novartis didn’t elicit any response as of press time Friday.
Coming around three years after Torrent acquired branded domestic formulations business of Elder Pharmaceutical in India and Nepal for Rs 2,004 crore, the deal could help the company become the largest player in the women healthcare segment, industry trackers say.
“With this acquisition, if Torrent manages to turn around the women healthcaovartis) like it did re business (of Novartis) like it did for Elder Pharma, then the company could become number one player in women healthcare space wit hin next couple of years,” said one of the persons quoted earlier, pointing out that Torrent is already the second largest player in the segment. “The (Novartis) portfolio was the only gap considering Torrent’s hormones and after Elder Pharma acquisition,” he said.
Torrent already has hormones and calcium preparation products like Shelcal. Novartis has other necessary women healthcare related products such as anti-DUB (dysfunctional uterine bleeding), which deals with abnormal bleeding in women.As per the industry trackers, it’s a huge market as nearly 50% of women above 45 years and nearly 20% of adolescents face DUB issue.
No investment banker is involved in the deal and the companies are going ahead with it directly. The two firms already had working relations as Torrent manufactures patented insulin in Ahmedabad for Novartis, said sources.
In 2014, PE firm ChrysCapital had made investment of around $40 million in Torrent. Around the same time, Torrent acquired Elder Pharma’s domestic business, and in July last year, it bought an active pharmaceutical ingredient (API) facility of Hyderabad-based Glochem Industries for an undisclosed amount.
Shares of Torrent Pharma closed 1.78% down at Rs 1,455.50 on Friday, while shares of Novartis India gained 2.5% to close at Rs 712.35.
Mergers and acquisitions in pharma have been on a rise in 2016.According to a report by Ernst & Young, 51 deals worth Rs 4.6 billion were concluded in 2016 in the pharma sector. Industry trackers predicted that 2017 could also see several deals as many larger players are consolidating their positions and many others are looking to hive off their non-core business.