Piramal To Acquire Janssen’s Criticare Brands For $175 Million

Ajay Piramal-led pharma-to-finance conglomerate Piramal Enterprises said on Monday (10 October) that its wholly owned Critical Care subsidiary in the UK has entered into an agreement to acquire five anesthesia and pain management injectable products from US-based drug maker Janssen Pharmaceutica in an all cash deal for an upfront consideration of US$155 million and a future payment of up to $20 million.

The products to be acquired are five injectable versions of well-established Janssen brands, Sublimaze (fentanyl citrate), Sufenta (sufentanil citrate), Rapifen (alfentanil hydrochloride), Dipidolor (piritramide), and Hypnomidate (etomidate). Piramal has agreed to acquire the brand names and all related IP as associated with the Products, including the know-how to make both the active pharmaceutical ingredients (API) and the finished dosage forms of the Products. However, the deal does not include the transfer of any manufacturing facilities or employees.

These brands of Janssen are currently marketed in at least 50 countries. As part of the transaction, Janssen will continue to supply finished dosage forms for up to three years and API for up to five years. Also, Janssen will continue to sell the products on behalf of Piramal until the marketing authorizations or relevant business relations are transferred to Piramal. Janssen can earn up to an additional $20 million if the acquired products achieves certain agreed financial milestones over the next 30 months. The transaction is expected to close this week.

“Healthcare is an important focus area for Piramal Enterprises and we are strongly committed to growing this segment, which has grown at 17 per cent annually over the last five years,” said Ajay Piramal, Chairman, Piramal Enterprises, in a statement.

“This would be our sixth healthcare acquisition in the last two years, inorganically investing Rs. 1,800 crores across our healthcare businesses. This acquisition is critical in shaping our product offerings, providing access to global markets and leveraging our existing capabilities and it is an important step in enabling Piramal Critical Care to start to address the global generic injectable hospital drug market,” he added.

The critical care or hospital emergency product market size is currently estimated at more than $20 billion globally.

According to Peter DeYoung, CEO, Piramal Critical Care, his business is currently the third largest player in the Inhalation Anesthesia market globally and continue to grow in that niche segment.

“These injectable anesthesia and pain products are a terrific addition to our existing portfolio that will allow us to provide greater value to our customers leveraging our existing organisation and distribution partners. Four of the acquired products are controlled substances which have higher barriers to entry. Once the business is fully transitioned to us, our customers and business partners will benefit from our broader product basket, and in turn we can grow the value of the acquired product portfolio through our team’s focused sales and marketing efforts. We remain committed to pursue additional value enhancing organic and inorganic opportunities in the future,” DeYoung said.

Piramal Enterprises, which is present in healthcare, healthcare information management and financial services, posted a total revenue of $1 billion in financial year 2016. Of this, 61 per cent is earned from outside India. In Healthcare, the group is one of the leading players globally in custom research and manufacturing services (CRAMS) as well as in the critical care segment of inhalation and injectable anesthetics. It also has a strong presence in the consumer health (OTC) segment in India. While its healthcare information management arm --Decision Resources Group, is amongst the top 20 US market research organizations which provide information services to the healthcare industry.

In Financial Services, Piramal Enterprises, through its Fund Management Division, provides comprehensive financing solutions to real estate companies and its Structured Finance Group (SFG) provides long term patient mezzanine growth capital to capital intensive businesses. The total funds under management under these businesses are $3.3 billion. The Company also has strategic alliances with top global funds like CPPIB Credit Investment, APG Asset Management and Bain Capital. PEL also has long term equity investments worth over $700 million in Shriram Group, a leading financial conglomerate in India.