Click to play videoMumbai: Ranbaxy's hunt for an ideal acquisition in the US, the world's largest generics market, never ends.
In the fast consolidating global generics space, Ranbaxy is making its own moves to stay among the top generics players in the US.
As Iceland headquartered Actavis withdrew to allow Barr labs to buy Croatian drug maker Pliva and US based Hospira looks set to acquire Mayne pharma, Ranbaxy is aiming to acquire the privately held us based URL-Mutual pharmaceuticals.
Sources say URL-Mutual is a mid-sized player with a robust pipeline of generics products.
Industry sources say the deal could fit Ranbaxy well as the company has to fill in the product gap of injectibles and liquids.
URL-Mutual's sales is estimated to be around $300 million and so the deal may be valued close to a billion dollars strictly on the basis of sales. Its expected that more Indian and global companies may soon join the race to buy URL-Mutual pharmaceuticals.
Ranbaxy may also tie-up with some private equity players to bid for this acquisition.
In fact, about six months ago Ranbaxy and Wockhardt had also looked at another US generics company – Morton Grove – a company, which has a strong pipeline in liquid orals. However, the valuations were said to be high for Morton Grove as well.
More and more Indian generics companies are expected to strengthen their presence in oral liquids and injectibles as the price erosion in these products are around 60 to 70 per cent of the pre-patent expiry price as against more than 90 per cent in tablets and capsules.
URL-Mutual devotes around 20 per cent of its sales to research and so sources feel its well-placed to absorb the price shocks of an otherwise falling generics market.
However, when contacted to comment on the deal senior Ranbaxy officials said: “Alongside our endeavour to grow organically, we scan the environment for inorganic growth prospects. Ranbaxy is looking at acquisition opportunities in key geographies and will consider opportunities based on the right value and synergies. However, we cannot comment on our target companies".
Observers say high maturations may discourage Indian companies to bid for US based generic companies.
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