Nicholas buys K-Lab brands for Rs 116 cr

Pharma major Nicholas Piramal India (NPIL) has entered into a definitive agreement with Mumbai-based Khandelwal Laboratories (K-Lab) to acquire its Anafortan and CEFI drug brands for Rs 116 crore.

Under the agreement, K-Lab will allow NPIL the use of certain patents with non-compete assurances for the two cefixime and Camylofin based drugs. The two drug groups generated revenues of Rs 49.1 crore, with operating margins of Rs 20.7 crore for the financial year ended March 31, 2008.

CEFI (cefixime) is a third generation cephalosporin antibiotic and K-Lab’s CEFI group is marketed in India in nine dosage forms. Its CEFI-XL and CEFI-OD, are based on extended release and once-a-day drug delivery systems.

K-Lab has won patents from the Indian Patent Office for these delivery systems. The CEFI group had revenues of Rs 26.2 crore for the year ended March 31, 2008.

Read more in The Business Standard article.

Nicholas Piramal may offer research arm stake to PEs

Mumbai-based drug major Nicholas Piramal India (NPIL) is in talks with private equity funds for the sale of a ‘small’ stake in its research company, to be soon renamed Piramal Life Sciences. Piramal Life Sciences will be listed in India in the first or second week of June.

The company is seeking funds for its recently spun-off research company to mitigate the risks and costs involve in new drug development. The move may also allow the company to license out its new molecules at a later stage of development and, therefore, extract more value from its research.

Three independent reports published by Lehman Brothers, Enam and Kotak Securities have valued the pipeline of drugs under development at the research entity between $480 million and $540 million.

Read more in
The Economic Times article.

Nicholas Piramal may hive off research arm

Pharmaceuticals major Nicholas Piramal India is exploring options to increase its funding towards research and development and plans to hive off its R&D activities into a separate company to launch the first new drug by 2010.

Nicholas Piramal, one of the highest R&D investors among the Indian pharma companies, had spent about Rs 130 crore in 2006-07 in R&D, an increase of about 63 per cent over the previous year.

However, though the company had earlier planned to invest about 7 per cent of its turnover in R&D, the actual spend was 5 per cent. This was due to the financial burden by the acquisition of the Morepath facility of Pfizer in 2006, Dr Ajay Piramal, chairman, said.

While none of the global generic drug research companies has hived off its R&D into a separate new company, three Indian companies hived off R&D in the recent past, in three unique different models.

Read more in The Business Standard article.