Cipla to acquire Avenue Therapeutics

Cipla has entered into an agreement to acquire US based specialty Pharma Company Avenue Therapeutics Inc. for $215 Million. This is in line with Cipla strategy of building a specialty drugs pipeline in the US.

Cipla's US subsidiary InvaGen Pharmaceuticals Inc. will make the acquisition in two stages. In the first stage, InvaGen or its affiliates will acquire a 33.3 per cent stake in Avenue's via new shares for around $35 mn (currently expected to be 5,833,333 shares at $6.00 per share).

Avenue is working on the development and commercialization of intravenous Tramadol, an analgesic to treat pain in adults. There is currently no approved intravenous formulation in the US. Avenue is evaluating IV Tramadol in Phase 3 clinical program: a trial in patients following bunionectomy surgery has been completed and a safety study is ongoing. A pivotal Phase 3 trial in patients following abdominoplasty surgery is expected to commence later this year in 2018.

Cipla, which trails only Sun Pharmaceutical Industries Ltd among Indian drug makers by market value, has been streamlining its operations globally, acquiring products and businesses in some regions while also shedding some units to sharpen focus on core areas.

Intas Pharmaceuticals to buy Actavis

Intas Pharmaceuticals Ltd agreed to buy Actavis UK Ltd and Actavis Ireland Ltd from Israeli generic drug maker Teva Pharmaceuticals Industries Ltd for an enterprise value of approximately Rs 5,083 crore in an all cash transaction.

The acquisition will expand Intas UK manufacturing presence with the addition of the Barnstaple site in North Devon and more than doubles Intas pan-European operations, with revenues exceeding $500 Million. The Barnstaple plant will become the company’s fourth UK site. The deal will also increase Intas access to UK and Irish retail and hospital markets.

The transaction is part of the European Commission’s anti-trust divestiture requirements arising from Teva acquisition of Actavis Generics. Teva agreed in July 2015 to purchase Allergan generics unit for $40.5 Billion in cash and stock a deal that made Teva the largest manufacturer of generic drugs in the world. Since then Teva has been on a divestment spree to address antitrust concerns.

In July, Cipla Ltd, India’s fifth largest drug maker, had acquired a portfolio of three products from Teva in the US. Aurobindo Pharma Ltd was also part of the 11 firms that agreed to acquire 79 existing and future drugs from Teva. Intas acquisition of Teva UK assets puts it in the big league of large overseas acquisitions by Indian Pharma firms. It is also the biggest outbound M&A transaction in the Pharma space so far in 2016.

Cipla to acquire two US Pharma Companies

Cipla EU Ltd will acquire two US-based companies, InvaGen Pharmaceuticals Inc. and Exelan Pharmaceuticals Inc., for $550 Million to strengthen its presence in world’s largest drug market. The combined revenue from these transactions is more than $200 Million for the year ended December and more than $225 Million in the 12 Months to June.

The all-cash transactions will give the company scale in the US generics market through a wide ranging product portfolio in central nervous system, cardiovascular system, anti-effectives, diabetes, as well as other value added generics. This is Cipla second largest acquisition in its 80 years of existence in 2013. Cipla acquired 100% stake in South African arm Cipla Medpro South Africa Ltd for Rs. 2707 crore.

With these acquisitions, the US now will have sales of $400 Million, accounting for almost 16-17% of its estimated earnings. InvaGen Pharmaceuticals has 40 ANDAs, 32 marketed products and 30 pipeline products expected to be approved over the next four years. In addition, InvaGen has filed five first to file products, which represent a market size of $8 Billion in revenue by 2018.

The acquisition of Exelan Pharmaceuticals provides Cipla access to the government and institutional market in the US. Generic Pharmaceuticals make up 80% of the prescriptions dispensed in the US but account for just 27% of total drug spending. The US generic drug market is estimated at a yearly $35 Billion.

Cognizant Buys Trizetto

Cognizant is a global leader in information technology, consulting, and business process services. It provide services such as claims processing, billing and call center operations to insurers, hospitals and some state run health care exchanges set up under President Barack Obama’s affordable care Act, as known as Obamacare. Colorado based Trizetto provides information technology services, including care management and the administration of benefits. 

Cognizant struck up its biggest deal, acquiring healthcare IT services provider Trizetto Corp for $2.7 Billion. It is the biggest acquisition in Indian IT sector. Healthcare is undergoing structural shifts due to reform, cost pressure, and shifting responsibilities between payers and providers. Trizetto will provide Cognizant to increase their market share. In 2008, Apax acquired Cognizant, a London based private equity firm. Trizetto was built up through 16 acquisitions in last 15 years, according to their website. It serves about 350 health care plans and supplies software to almost 245,000 doctors and other care providers.

Following this acquisition, Cognizant grip on the segment will increase further, leaving behind peers like WIPRO, Infosys, and TCS. At present, healthcare accounts for around 26 percent of Cognizant revenue, which is estimated to go up to 30 percent on integration with Trizetto. Cognizant and Trizetto have had a long-term relationship. This acquisition represents a great opportunity to integrate services across three horizons. Traditional IT services, high growth businesses like management consulting, business process services, and IT infrastructure services and will provide greater value to clients.

There are lot of acquisitions and changes going on in Indian Healthcare sector. E-commerce sector is focusing on providing medical facilities online. Companies like Ranbaxy, Cipla, and Sun Pharma are into manufacturing of new medical products. IT sector is all set to provide services to clients and hospitals. Tech giants are developing products which includes health apps or which can tell people health status. We can assume that technology is going to play a major role in Healthcare sector and it is going to benefit millions of people. It is estimated that Healthcare business is to grow at a rapid pace.