Ranbaxy Laboratories has acquired the US rights to a range of dermatology products from Bristol-Myers Squibb, paying $26 million for the privilege.
The deal gives the Indian drugmaker the rights to 13 “highly-regarded products” which have been on the market over 10 years and are used in the treatment of acne, dermatitis, psoriasis, fungal infections and scabies. Annual revenues for the treatments are around $15 million and Ranbaxy is confident that it can push this figure significantly higher.
The US dermatology market value is estimated at $10 billion and enjoys growth rates of 10% per annum and Venkat Krishnan, vice president and regional director for Ranbaxy in North America, said that the products “create opportunities that can be effectively leveraged through our current franchise” in dermatology, which is led by Sotret (isotretinoin) for the treatment of severe recalcitrant nodular acne. Sotret is the largest seller among the isotretinoin brands with a market share of around 36%.
Ranbaxy noted that the deal gives it a “predictable revenue stream” and Mr Krishnan added that “this business opportunity also creates a broader platform for the introduction of value added line extensions and additional brands as our involvement and commitment to dermatology expands.” He concluded by saying that the deal “underscores our strategy of pursuing inorganic growth opportunities to complement” its internal efforts.
More acquisitions lined up
The Gurgaon-headquartered firm’s acquisitions this year are unlikely to be limited to the BMS dermatology deal. Chief executive Malvinder Singh told Reuters that Ranbaxy is evaluating several opportunities and was open to partnering private equity firms in a bid, although he claimed the company does not need to worry about any shortage of funds.
However, he said that "if the size of the deal is very large, it is good to have a risk-reward sharing. I would say we have a good sense of who we want and tomorrow, if we need to work with somebody, there is a shortlist on my mind, who we would like to work with."
Mr Singh confirmed that Ranbaxy had worked with an unnamed private equity firm when it was considering a bid for the generics unit of Merck KGaA, sold to Mylan Laboratories earlier this month for 4.9 billion euros. However that deal “did not make economic sense," he claimed, adding that the price was far higher than Ranbaxy would have offered.