In its sixth deal in the healthcare space over the last two years, Ajay Piramal-led Piramal Enterprises has agreed to acquire five injectable anaesthesia and pain management products from Janssen Pharmaceutica for a deal valued at $175 million.
Piramal will pay an upfront cash of $155 million and the rest on meeting certain sales-related milestones, a press release said. The deal is likely to bolster the portfolio of critical care drugs for the Indian drug maker. Janssen’s drugs are sold in over 50 countries.
Piramal Enterprises has agreed to acquire the brand names and all related IP associated with the products, including the know-how to make both the active pharmaceutical ingredients and finished dosage forms. The drugs are injectable versions of Janssen’s brands namely Sublimaze, Sufenta, Rapifen, Dipidolor and Hypnomidate. Piramal noted the deal does not include any manufacturing capabilities or employees.
As part of the agreement, Janssen will continue to supply finished dosage forms for up to three years and API for up to five years. The global drug maker will continue to sell the products on behalf of Piramal until the marketing authorisations or relevant business relations are transferred to Piramal.
Janssen will earn up to an additional
US$20 million if the product portfolio achieves certain agreed financial milestones over the next 30 months. The transaction is expected to close this week.Ajay Piramal, Chairman, Piramal Enterprises said, “This acquisition is critical in shaping our product offerings, providing access to global markets and leveraging our existing capabilities. 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.”
The healthcare segment is believed to have grown at 17% CAGR over the last five years, a sector where Piramal has invested around Rs 1800 crore, over the last two years for inorganic expansion.
Peter DeYoung, CEO, Piramal Critical Care informed four of the acquired products are controlled substances which have higher barriers to entry. Piramal Enterprises holds the third position in the global inhalation anesthesia market. The company said the addition of Janssen’s products will help leverage greater value for the customers. With a diversified presence spanning healthcare to financial services, Piramal Enterprises saw FY2016 consolidated revenues at roughly $1 billion, of which over 60% accounted from exports.
