In a deal that could propel the $650-million (Rs 3,315- crore) Piramal Healthcare (PHL) into the billion dollar revenue league (Rs 5,100 crore), the Ajay Piramal-led company has bought the molecular imaging research and development portfolio of Bayer AG, which includes the rights to an Alzheimer’s treatment drug.
The size of the deal, funded through internal accruals, was not disclosed.
The agreement is currently awaiting approval from the US Food and Drug Administration (FDA), and is likely to be completed by the end of this year. It gives the company control over the intellectual property rights, including patents, trademarks and know-how, of Bayer.
“There are about 25 million patients of Alzheimer’s disease globally and it is likely to grow to 100 million by 2020 ...,” said Ajay Piramal, chairman, Piramal Group. “Hence the segment has a huge revenue potential and low competition. This is a market that will develop.”
He did not specify a timeline for the company to touch the billion-dollar revenue mark.
According to analysts, about two years would be par to hit the target. “It will open a new revenue stream for Piramal Healthcare and has a good potential,” said Ranjit Kapadia, senior VP, Centrum Broking.
The only concern is that the drug completes its phase-3 trials successfully,” Kapadia said.
The acquired portfolio includes Florbetaben, which is in the final stages of clinical trials, detects symptoms in probable sufferers of Alzheimer’s and could allow early diagnosis and specific treatment of the disease.
“We are moving from the branded generic space to the Intellectual Property. The new way forward is when we launch patents products in the global markets,” said Piramal.
Florbetaben will be competing with companies such as Eli Lilly and Co, Pfizer Inc and General Electric in the Alzheimer space, a global market estimated at anywhere from $1 billion to $5 billion.
The base of this acquisition will be Berlin with about 20 scientists retained from Bayer. “Large pharma companies have realised they need to narrow down their focus to a few things. Bayer was ready to sell this portfolio for the same reason,” said Piramal.