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Drug-maker Lupin is set to make its second acquisition in four years in Japan. It has agreed to acquire up to 100 per cent outstanding shares of speciality injectibles company I'rom Pharmaceutical Co from I'rom Holdings Co, an integrated Japanese healthcare provider.
The acquisition was effected through Lupin's Japanese subsidiary, Kyowa, for an undisclosed sum. The Mumbai-based Lupin had acquired Kyowa in October 2007.
The latest acquisition is a good opportunity in Japan, as Kyowa is into oral drugs and has no access to hospitals, said Mr Vinod Dhawan, Lupin President (Asia Pacific, Middle East, Africa and Latin America). It provides a good vehicle for the fast increasing generics space, he told Business Line .
Attractive market
Japan has been attractive for Indian drug-makers, since it is the world's second largest individual market for medicines at over $60 billion. I'rom Pharma (IP) had revenues of $75 million, he said, as against $68 million the previous year. The transaction includes 215 people, he added.
Responding to a query on why I'rom Holdings (IH) sold its subsidiary, Mr Dhawan said, the parent company wanted to focus on its contract research business.
IP has a presence in the DPC (diagnosis procedure combination) hospitals in Japan, encouraged and reimbursable by the Government. There are currently over 1,400 DPC hospitals in Japan, covering over 35 per cent of all hospital beds nationwide, Lupin said. DPC hospitals encourage the use of generic drugs —medicines that are not or have out-lived their patent protected period. The market size of DPC hospitals is about $11 billion, where about 45 percent is injectibles, he added.
In a separate development, Kyowa has also entered into a strategic alliance involving operational support from IH's site management organization (SMO) subsidiary I'rom Co for clinical studies conducted by Kyowa for the Japanese market.
Priority
Japan is a priority market for Lupin, besides the US and India. Between the two acquired companies in Japan, Lupin looks to clock revenues of about $300 million, he said, from the present about $165 million.
While Japan is admittedly a tough market to crack, Mr Dhawan observed, “no market is easy” – and each market had its own contours when it comes to growth prospects.
Lupin would look at supplementing its products in Japan from its manufacturing bases in India, he said, adding that the regulatory approval process was under-way. Lupin shares were down close to two per cent on the BSE at Rs 446 on Thursday.
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