Five top Indian drug companies are racing to acquire Sagent Pharmaceuticals, which is a NASDAQ-listed specialty injectables maker. The companies -- Torrent pharmaceuticals, Aurbindo pharma, Cipla, Lupin and Dr Reddy's Laboratories -- have already begun discussions with regard to the matter.
Large generic drug makers and financial investors such as private equity funds may also be interested. The total valuation stands at Rs 3,400 crore.
Sagent Pharmaceuticals assigned Perella Weinberg Partners -- a New-York based global financial services firm -- the task to gather information for potential opportunities as part of its strategic alternatives, The Economic Times said.
Acquiring the pharmaceuticals company can be an ideal opportunity for any firm that has injectable manufacturing platform and focuses on "hospital-based medicine".
"Sagent has a tailor-made injectable sales and distribution outfit that could suit Indian companies. But the injectable business is getting highly competitive so the margins are getting squeezed. This is the right time to exit (for current investors), as money is available and valuations will be better," a senior executive told the publication.
Indian drug makers face tough regulatory actions from the US Food and Drug Administration (FDA) and thus, the yearning for complementary manufacturing sites and products is sky-high among the Indian companies.
According to reports, Sun Pharmaceutical Industries was also interested and had even initiated the discussion procedure, but backed out after the valuation.
Founded ten years ago, Sagent Pharmaceuticals has a wide portfolio of 55 products and can provide a $2 billion-worth opportunity to the acquirer. The company claims leadership position in the area of anti-infective drugs for critical care such as propofol, adenosine, Oxcacillin and heparin, according to its official website.
The company reportedly forecasted sales of $350 million approximately for 2016 recently; this represented a compounded annual growth rate of 14% since 2013, the report added.