By Paramita Chatterjee and CH Unnikrishnan At a time when new age sectors such as e-commerce and mobile are emerging as hot investment destinations for private equity and venture capital funds, the traditional healthcare sector is witnessing an upswing and raking in huge moolah from the investor fraternity. Healthcare is considered a safe bet for fund managers as returns in this sector are relatively assured, said experts. It primarily caters to the domestic market and is independent of any slowdown gripping other sectors that are riding on the domestic consumption wave. Healthcare firm Portea Medical recently raised $37.5 million from a consortium of investors such as Accel Partners, International Finance Corp, Qualcomm Ventures and Ventureast. Venture firm Sequoia Capital infused $20 million in MedGenome Labs and Celon Laboratories, respectively, although in the latter the investment was done along with Fidelity Growth Partners. The list of investments by PE and VC funds in the sector is vast. While, many more established as well as startup healthcare players, including drug innovator NovaLead Pharma and primary healthcare chain HealthSpring, are planning to raise new round of funding through private equity route. According to data available with Grant Thornton, in the January-September period this year, as many as 36 deals were sealed in the pharma, healthcare & biotec companies where total amount invested in them stood at $1,015 million. While the number of investments is lesser this year than what it was in the corresponding period in 2014, what is noteworthy is the fact that in terms of total deal size, PE and VC funds invested more than double the amount they invested last year. In the first 9 months of 2014, risk capital investors infused $445 million. As demand for better healthcare is growing in the country, sectors within healthcare such as pharma, multi speciality hospitals, single specialty and day care centres, among others, too are witnessing significant growth opportunities and are in turn attracting investor interest. “There is immense potential in healthcare which is yet to be tapped specially in tier II and tier III cities across the country,” said Mark Britnell, chairman and partner, Global Health Practice, at KPMG. Drug researcher NovaLead Pharma and primary healthcare and wellness chain Healthspring Pvt Ltd are also currently in the process of raising another round of funding for further expansion. "We are in talks with a bunch of private equity funds, including our exiting investors, to raise at least $35 million, one of our largest tranches of funding so far and it will be closed by end of March next calendar year," said Supreet Deshpande, managing director NovaLead, in a Tuesday (November 2) interview. Family healthcare chain HealthSpring, which is planning to scale up its operations by taking the number of its centers from the existing 24 to 200 in the next five years, is also looking to raise a substantial amount of capital through private equity route in the next eighteen months. "We are talking to some large PE funds to raise next round of funding to back the expansion, although the existing investors will remain invested and are interested to put in more money," said Koushik Sen, co-founder and CEO, Healthspring. What’s more, significant M&A activity within the sector – both in terms of inbound and out bound deals – and the upcoming IPOs, too, make it attractive for fund managers to invest first and later cash out profitably. As per data available with Prime Database, as many as 4 companies have lined up their IPO plans this year. These include Aster DM Healthcare, Thyrocare Technologies, Dr. Lal Pathlabs and Narayana Hrudayalaya. The plan of Alkem Laboratories, India’s fifth largest drugmaker by domestic sales, to tap the capital market after 42 years of its active existence in the domestic pharma market, is yet another landmark healthcare IPO to hit the market shortly. The company, which was founded in 1973, has filed its draft red herring prospectus (DRHP), will offer 10.75 per cent of its equity (up to 12,853,442 equity shares) to public and list the company at leading stock exchanges. One of the oldest generic drug companies in the country, Alkem Lab never explored fund raising through equity market as the founders Samprada Singh and Basudeo Narayan Singh — doyens of Indian pharmaceuticals industry — didn’t want to go public and there weren’t any compelling reasons to raise money from public. "The equity market seems quite vibrant now and we feel it’s the right time to unlock the value that we have created over the period by offering a small percentage of the equity," said B N Singh, promoter and executive chairman B.N. Singh told BW Businessworld in a recent interview. Healthcare sector in India is poised for a rapid growth and is expected to be $280 billion in terms of size in another 5 years, growing at a compound annual growth rate of 16 per cent, as per a joint report by FICCI-KPMG.
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Drug manufacturer Alkem Laboratories Ltd is set to launch an initial public offering (IPO) worth nearly $210 million by the second week of December, three people involved in the share sale said on Tuesday (03 November).The IPO will be India's third high-profile market debut in the closing months of 2015, after InterGlobe Aviation Ltd — the owner of India's biggest airline, IndiGo — raised $459 million and Coffee Day Enterprises Ltd raised $176 million.Alkem, a producer of generic drugs, filed a draft prospectus with India's capital markets regulator in August for an IPO of up to 12.85 million equity shares, constituting 10.75 per cent of paid-up capital.Market volatility prompted speculation that the offer could be postponed to 2016."It will be in the first or second week of December, though most likely the second," said one of the people involved in the deal, who were not authorised to speak with media on the matter and so declined to be identified.The person said the company had yet to determine a valuation.In January, people involved in the deal told Reuters the company planned to raise 15 billion to Rs 1,800 crore ($243 million to $291 million). But the people on Tuesday said the company would raise closer to $210 million.While 2015 has seen a significant rise in debuts - the biggest in volume terms since 2012 — the IPO market is far from the record $8.5 billion of 2010, and the average size of listings has shrunk.Hitting sentiment, Coffee Day slumped around 18 per cent on its debut on Monday.Alkem booked net profit of Rs 461 crore and revenue of Rs 3,783 crore for the year through March 2015. The company has 16 manufacturing facilities — 14 in India and two in the United States.Officials at Alkem were not reachable for comment.Spokespeople for Nomura, Axis Capital, JP Morgan and Edelweiss — the bankers on the deal — did not respond to requests for comment.(Reuters)
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In a joint survey conducted by PHD Chamber of Commerce and Industry and 1mg Technologies on challenges faced by consumers while buying medicines from Pharmacies, it has been stressed that an overwhelming majority of patients seek more convenient ways to get their medicine.They face problem of visiting multiple pharmacies to get all their medicines and also notice price difference across pharmacies for the same drug.Releasing its findings, here on Tuesday, the two organizations say that 86.5% customers face the problem of visiting multiple pharmacies to get all their medicines whereas 92.2% people notice price difference across pharmacies for the same drug. It also highlights that 98% people like the convenience of door step delivery of the medicines.The survey also reveals that over 90% people wish to be informed in detail about the medicine they are taking and want to have detailed information on them such as for instance their exact use, interactions, potential side effects so on and so forth.In addition, it also highlights that 72.7% people prefer e-bills over normal paper as they wish to keep track of them in a convenient way.The survey also emphasizes E Pharmacy will significantly improve Consumer convenience and access. This will especially help chronic patients with nuclear families, and also patients who are not in a condition to go out to find a pharmacy. Moreover, a normal chemist shop can only keep limited inventory, resulting in a consumer having to ask multiple stores to get his or her medicine.In a representation submitted to the Drugs Controller General of India, the Chamber has highlighted that in e-pharmacy, order should be processed from a licensed premises only and be dispensed by a registered pharmacist in a licensed premise, adding that scheduled drugs be also sold off only against a valid prescription of a registered medical practitioner as per the Drug and Cosmetic Act.The Chamber has also pointed out that e- pharmacy should share the details of the licensed pharmacy fulfilling the order with the users using email and SMS.The Chamber and the 1MG.com are also of the view that Schedule X and other habit forming drugs should not be allowed to be sold through an e-pharmacy model. There should be adequate checks and balances in place to prevent sale of any such drugs.The PHD Chamber has also emphasized that restrictions ought to be placed on illegal international trade through e-pharmacy since drugs are being shipped across the international borders without any prescription and approval from the concerned authorities.(BW Online Bureau)
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GlaxoSmithKline Pharmaceuticals on Saturday (31 October) reported a 25.39 per cent dip in standalone net profit at Rs 96.05 crore for the quarter ended September 30. The company had posted a net profit of Rs 128.67 crore for the same period a year ago, GlaxoSmithKline Pharmaceuticals said in a filing to BSE. Standalone total income from operations also declined to Rs 700.09 crore for the quarter under review as against Rs 746.76 crore for the corresponding period of previous fiscal. Established in 1924 in India, GlaxoSmithKline Pharmaceuticals product portfolio includes prescription medicines and vaccines. The firm’s prescription medicines range across therapeutic areas such as dermatology, anti-infectives, gynaecology, diabetes, cardiovascular diseases, respiratory diseases and oncology. (PTI)
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By Simar SinghIn the quest to facilitate a multi-sectoral response to prevent, control and manage growing cases of cancer, diabetes, heart and respiratory disorders, mental illness, injuries and other chronic diseases In India, a national blueprint on non-communicable diseases was released by The Partnership to Fight Chronic Diseases (PFCD) in New Delhi on Wednesday (28 October). Reports stipulate that non-communicable diseases contribute to 53 per cent of the total disease burden in the country. It is also estimated that 60% of the total deaths in India are related to them. "An integrated and evidence-based chronic disease management framework for non-communicable diseases is missing in India, and, therefore, the release of the national blueprint -- a one-of-its-kind initiative in this direction -- could be a formative step towards achieving the vision of a healthy India by 2025," said PFCD's chairman Dr. Kenneth Thorpe. He explained, "India is witnessing a rapid health transition due to changing disease patterns, with NCDs attributing to higher mortality and morbidity rates. Addressing NCDs takes on paramount importance as alarming statistics show that they pose a serious threat to both the social and economic development of the country." The result geared action plan outlined in the blueprint hopes to bring together central and state governments, private entities and healthcare implementers to adopt the best possible practices and innovative measures to address the growing burden of non-communicable diseases in India. Dr Damodar Bachani,Deputy Commissioner (NCD) in the Ministry of Health who was also present at the event said, "This National Blueprint is an attempt to shift the focus from an 'issue-stating' to the 'problem-solving' stage, and bring in a systematic approach to address the growing burden of non-communicable diseases in the country."
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By CH Unnikrishnan Research focused generic drug maker Glenmark Pharmaceuticals on Thursday (29 October) said the company posted about 20 per cent growth in net profit at Rs 197.78 crore for the July-September quarter. Its sales grew 13.6 per cent to Rs 1,909 crore during this period as compared to Rs 1,680 crore a year ago. “We have recorded good overall growth in the quarter powered by our India, US and Europe businesses, although the devaluation of currencies across emerging markets, especially in countries like Brazil and Russia had an adverse effect on our operations,” said Glenmark chairman and managing director Glenn Saldanha in a Thursday statement. The company’s sales in India during the quarter at Rs. 608.54 crore was up around 35 per cent compared to Rs 478 crore. While, its US and European sales went up by 18 per cent and 23 per cent to Rs 598 crore and Rs 160 crore respectively. “Going ahead, we expect our India, US and Europe businesses to continue to drive growth for our company,” added Saldanha.However, the company’s revenue from its Latin American and Caribbean operations at Rs 165. 67 crore, recorded a decrease of 28.24 per cent in the second quarter. For the first half ended September 30, Glenmark’s consolidated revenue at Rs 3564.61 crore as against Rs 3167.64 crore was up by 12.53 per cent over the previous corresponding period.
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The US Food and Drug Administration warned Novartis AG last week after the Swiss firm was found in violation of manufacturing practices last year at two of its India drug-making plants, Novartis said. The warning, issued to Novartis's generic drugs unit Sandoz on October 22, came after FDA officials inspected its Turbhe and Kalwa sites in western India in August 2014. The FDA expressed its concerns to the company last year, and Novartis has been working on addressing them since, it said in a statement disclosing its quarterly results on Tuesday. Novartis did not specify details of the warning. The FDA usually posts warning letters on its website a week after issuing them. The letter to Novartis was not posted as of 1000 GMT on Wednesday. "Sandoz will continue to work closely with the FDA to ensure all observations are resolved to the agency's full satisfaction," the company said, adding that no supply disruptions were expected. The FDA has banned more than 30 drug manufacturing plants in India since 2013, as it ramps up inspections of foreign facilities that supply to the United States. Several of India's largest drugmakers have faced rebukes, hurting the reputation of the industry, an important supplier of cheap generics. More recently, foreign firms' India plants have also come under the scanner. U.S. firm Mylan NV received a stern warning from the FDA in August for faulty manufacturing practices at three of its India drugmaking plants. Novartis already stated in July that it would shutter the Turbhe plant, where it made antibiotics and active pharmaceutical ingredients, by December 2016, as part of plans to optimize its global manufacturing network. The Kalwa site has been remediated, Novartis CEO Joe Jimenez told analysts on a conference call on Tuesday. (Reuters)
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Healthcare platform firm Practo has entered Malaysian market bringing its products – Practo Search and Practo Ray – to the country.Starting from Wednesday (28 October), consumers in Kuala Lumpur will be able to search for doctors across more than 350 clinics and 500 doctors listed on the platform. With over 50 per cent coverage of private practices in Kuala Lumpur, Practo becomes the largest such database for the city.“Practo Ray and Practo Search come together to create the world’s first healthcare hyperloop, connecting the entire healthcare ecosystem and helping consumers make better healthcare decisions. Our goal is to provide a platform where our offerings work seamlessly together to deliver the best experience for all users,” said Shashank ND, Founder & CEO, Practo.Over the next few weeks Practo will expand its coverage within Kuala Lumpur to have almost all the private practitioners available on the platform. Practo’s goal is to list all the healthcare professionals in Malaysia. To make sure the data is reliable, Practo‘s own team combs through every street to verify all doctors. Practo verifies and lists doctors for free and does not charge consumers or doctors to find, book, or receive appointments.Practo also plans to be present in northern Malaysia including Georgetown, Ipoh, Taiping, and Alor Setar.This is our fourth market in Southeast Asia after Singapore, Philippines and Indonesia. Digitization of healthcare is integral to building a healthy nation and we’re positive that our products can help do that in Malaysia as well” added Shashank ND.(BW Online Bureau)
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