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
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