In­tas Eyes Larger Piece of Teva’s Euro­pean Ops Co said to be bid­ding for women’s health, on­col­ogy, pain mgmt di­vi­sions for $1.5 b now

The Economic Times - - Companies: Pursuit Of Profit - Ari­jit.Bar­man@ times­group.com

Mumbai: Within a year of buy­ing out Teva’s UK and Ire­land as­sets and break­ing into the top 20 gener­ics play­ers club, In­tas Phar­ma­ceu­ti­cals is on the prowl again for a larger piece of Teva’s ex­ist­ing op­er­a­tions in Europe.

The closely held Ahmedabad-based drug­maker, which has Te­masek and Chrys Cap­i­tal as its in­vestors, is bid­ding for Teva’s women’s health, on­col­ogy and pain man­age­ment di­vi­sions in Europe for $1.5 bil­lion, said mul­ti­ple sources aware of the on­go­ing ne­go­ti­a­tions.

In­tas has reached out to sev­eral In­dian and global banks — ICICI, Axis, Citi, Bank of Tokyo Mit­subishi UFJ, HSBC among oth­ers — to fi­nalise the fi­nanc­ing be­fore putting in a bind­ing bid by the end of this month. If suc­cess­ful, this will be the largest cross bor­der M&A (merg­ers and ac­qui­si­tions) in­volv­ing an In­dian pharma com­pany.

Teva, the world’s largest maker of generic drugs, plans to di­vest some as­sets in­clud­ing its global women’s health and Euro­pean cancer and pain-treat­ment di­vi­sions to re­duce debt. The drug­maker last year paid about $40.5 bil­lion to buy the gener­ics busi­ness from Al­ler­gan Plc just as prices of cheap copy­cat drugs be­gan to fall. The ill-timed move sad­dled the com­pany with al­most $36 bil­lion in debt, forc­ing Teva to slash its profit fore­cast twice, and even­tu­ally led to the exit of chief ex­ec­u­tive Erez Vigod­man in Fe­bru­ary. Its di­vest­ments in the UK in 2016 were man­dated by the an­titrust au­thor­ity as part the Al­ler­gan takeover. The Is­raeli com­pany is work­ing with Mor­gan Stan­ley and Bank of Amer­ica Mer­rill Lynch to sell the two di­vi­sions while Deutsche Bank and Roth­schild are sep­a­rately ad­vis­ing In­tas.

In­tas Pharma de­clined to com­ment. Teva’s spokesper­son didn’t re­ply to emails.

“This is a proper sale process so there will be global pri­vate eq­uity and strate­gic suit­ors with which In­tas will have to com­pete. But hav­ing al­ready ac­quired parts of Teva’s Euro­pean busi­ness last year, they will be a strong con­tender,” said the CEO of a ri­val com­pany who had eval­u­ated the same tar­get but sub­se­quently with­drew.

In­tas is now the largest pri­vately held phar­ma­ceu­ti­cal com­pany in In­dia with an an­nual turnover of over $1 bil­lion and a val­u­a­tion al­most twice that.

In FY16, In­tas posted rev­enue of .₹ 6,566 crore and profit af­ter tax (PAT) of .₹ 882.4 crore. It had to­tal debt of .₹ 615.3 crore and a net worth of .₹ 4,481 crore, ac­cord­ing to Regis­trar of Com­pa­nies (RoC) data. Teva’s women’s health plat­form in­cludes a com­pre­hen­sive prod­uct port­fo­lio across con­tra­cep­tion, fer­til­ity, menopause and os­teo­poro­sis, gen­er­at­ing $250 mil­lion in rev­enue and di­rect ac­cess to 40 coun­tries in Europe, the Mid­dle East and Africa. The seg­ment has grown glob­ally at a com­pounded an­nual growth rate (CAGR) of 6.2% (ex­clud­ing the US) over the last five years, driven by de­mo­graphic trends as per IMS Health data.

Sim­i­larly, the on­col­ogy and cancer pain port­fo­lio fo­cused on seven key and com­ple­men­tary brands — Lon­quex, Trisenox, Ef­fen­tora and Ac­tiq among oth­ers — have a pan-Euro­pean foot­print span­ning Ger­many, France, Spain, the UK, Italy, Cen­tral and East­ern Europe and Scan­di­navia with net sales of $302 mil­lion in 2016.

Any trans­ac­tion would in­volve a carve out of Teva’s Euro­pean on­col­ogy pain prod­uct port­fo­lio Orca, which is part of Teva’s Euro­pean spe­cialty health­care so­lu­tions. Orca con­sists of a va­ri­ety of ther­a­pies to treat cancer and side ef­fects such as re­duc­tion of white blood cells due to chemo­ther­apy and re­sul­tant pain.

HIGH ON GROWTH

In­tas has around 300 out-li­cens­ing agree­ments with long-term sup­ply agree­ments and mar­ket­ing set­ups in six ma­jor western Euro­pean coun­tries — the UK, Nether­lands, Ger­many, Spain, France and Italy.

As a re­sult of its R&D (re­search and de­vel­op­ment) ef­forts, the com­pany has 3,000-plus mar­ket­ing au­tho­ri­sa­tions in the Euro­pean mar­ket and a strong prod­uct pipe­line for day one launch of prod­ucts in the mar­ket.

Its Euro­pean arm Ac­cord Health­care focuses on growth-ori­ented ther­a­pies, such as on­col­ogy, pain man­age­ment, car­di­ol­ogy, neu­rol­ogy, nephrol­ogy, urol­ogy, psy­chi­a­try, di­a­betol­ogy and gas­troen­terol­ogy. It had more than 5,500 prod­uct ap­provals as of April 2016 and its sales, mar­ket­ing and dis­tri­bu­tion net­work cov­ers more than 70 coun­tries.

Started four decades ago by phar­ma­cist Has­mukh Chudgar, In­tas is run by the three sons of the oc­to­ge­nar­ian founder — Bin­ish, Nimish and Ur­mish. The Chudgars own as much as 85% of In­tas, while the two in­vestors men­tioned above hold the re­main­ing 15%.

In­tas is now the largest pri­vately held pharma co here with an an­nual turnover of over $1 b

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