Mumbai-based Wanbury Ltd, formerly known as Pearl Organics Ltd, has completed the acquisition of Pharmaceutical Products of India Ltd (PPIL) — a sick Mumbai-based bulk drug maker — for Rs 26 crore.
PPIL acquisition will boost its API business.
MUMBAI: Mumbai-based Wanbury Ltd, formerly known as Pearl Organics Ltd, has completed the acquisition of Pharmaceutical Products of India Ltd (PPIL) — a sick Mumbai-based bulk drug maker — for Rs 26 crore. It now plans to acquire a European company with as much as euro 25 million in revenues.
Ashok Shinkar, director, finance, Wanbury, told DNA Money, “Talks are on with a few Western European companies having branded generics business and local marketing strengths and we hope to sign the deal by this year itself.” He, however, refused to divulge further details. The acquisition of PPIL is expected to help Wanbury boost its active pharmaceutical ingredients (API) business.
The Indian API industry is set to witness a boom as around $40-50 billion of branded drugs go off patents in the next five years in the US alone, some $21 billion just in 2006. Currently, most multinational pharma majors outsource their API requirements to Indian firms.
According to a recent study by the Chemical Pharmaceutical Generic Association of Italy, India is set to become the second-largest API manufacturer in the world with sales of $4.8 billion by 2010, growing at a whopping 19.3% annually. It is currently the third-largest with sales of $2 billion, after Italy. PPIL has three manufacturing units and one formulations facility. Its Patalganga facility, said to be five times bigger than Wanbury’s existing unit at the same place, is a semi-finished unit that would be completed and upgraded by Wanbury to US FDA standards. Wanbury’s API production will go up by 4-5 times once the expansion of PPIL’s facilities is completed.
Wanbury acquired PPIL, a sick company that was referred to the Appellate Authority for Industrial and Financial Reconstruction, through a scheme of arrangement with banks and financial institutions that held its assets. Wanbury claims to be the world’s largest producer of metformin, a diabetes management product.
As part of its foray into contract research and manufacturing services (CRAMS), Wanbury plans to merge Andhra Pradesh-based bulk drug manufacturer Doctor Organic Chemicals Ltd (DOCL) with itself. It has already bought the controlling stake in DOCL.
Confirming this, Shinkar said, “The deal is an equity swap. DOCL promoters are getting a stake in Wanbury for their 49% equity.” DOCL has US FDA-approved facilities for manufacturing non-sterile APIs and presently manufactures lbuprofen, mcfenamic acid, glucosamine and gabapentene intermediate among other products. Hence, this collaboration would allow Wanbury to immediately increase its product portfolio in the regulated markets of Europe and US.
“After the merger with DOCL, we would have more focus on CRAMS segment and sign more manufacturing contracts with MNCs,” said Shinkar.
Wanbury manages 3 multi-product plants, including two US FDA-approved facilities across India. Its production facilities are located at Patalganga, Tanuku and Tarapur. Wanbury exports to over 50 countries, and over 65% of its products are sold in regulated markets including the US and Europe.
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