The Hindu Business Line : Animal health players make hay as drug cos exit segment

Realignment
The domestic animal healthcare business in estimated to be Rs 1,000 crore
The distribution and marketing chain of drugs is different for humans and animals

Mumbai , June 4

Medicines used for humans and animals may be similar. But the dynamics of selling into the human and animal health markets, respectively, can be quite different. Or so it seems, with a clutch of drug companies exiting from their animal health businesses, making way instead for dedicated players in the same segment.

The most recent exit, a little more than a month ago, was when GlaxoSmithKline (GSK) Pharmaceuticals sold its animal health business to the French animal-health and veterinary products company Virbac for a consideration of Rs 207.1 crore. The acquisition marks Virbac's entry strategy into India.

Late last year, Ranbaxy Laboratories divested its allied businesses that included its animal healthcare business to ICICI Venture Funds. And in late 2003, the Netherlands-based animal nutrition company Provimi acquired the animal health division of Unichem Laboratories. The acquisition was made through Vetcare, a 51 per cent subsidiary of Provimi in India.

Just as drug companies are getting out of what is for them an allied activity, dedicated animal health companies are buying into the business, observes Mr Aluri Srinivasa Rao, Director-Investments with ICICI Venture Funds Management Company Ltd.

Growth at 15-25 pc

The domestic animal healthcare business in estimated to be Rs 1,000 crore, growing between 15 and 25 per cent, he said. More growth is in store, as dedicated players change the nature of products being brought into the market. The introduction of biologicals will drive growth, especially

as the world battles with animal-related diseases such as bird-flu and mad cow, he observed.

Drug companies find that though they make similar products for humans and animals, the distribution and marketing chain is quite different, points out Mr Alok Gupta, Yes Bank's Country-Head for Life Sciences and Biotechnology.

The animal health market comprises livestock and poultry, besides the emerging pet food and aquaculture segments.

Pfizer reiteration

Meanwhile, top-management with Pfizer recently told analysts that the company remained committed to its animal health business. This reiteration put a lid on rumours that Pfizer was set to do a GSK with its animal health business.

More Stories on : Pharmaceuticals | Animals & Livestock

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Monsoon weakens

BSNL wants immediate payment from MTNL

Waiting to bloom

Plan for direct fertiliser subsidy to farmers dropped

Investors waiting for index levels to rise for redemption?

Animal health players make hay as drug cos exit segment

Market may see an end to downtrend

Current situation doesn't bode well for gold

New I-T returns form — Not Saral anymore!

IBM chief Palmisano coming