Healthcare domain till recently has seen establishment of linkages to sell generic drugs by some of the Pharma giant like Piramal Healthcare Group. But ,now the latest trend & the new vision of Pharma Giant likes of Piramal Heathcare group is owning intellectual property & converting it to products.It is speculated that in many more years to come ,healthcare industry ,a billion dollars investement industry will see this trend with many more companies adding IP as their assets .
An Indian Businessman & a forbes Billionaire ,Ajay Piramal -led Piramal Healthcare Ltd ,very well understand the value of IP as an asset for any company & more so in a case of MNC’S like Piramal Group. Realizing this, Mr.Piramal recently announced the acquisition of US healthcare databases ,reserach & analytic capabilities in the from of Decison Resources Group (DRG)for $653 million (RS. 3,400 crore) marking its entry into the $5.7 billion global healthcare database and consulting services industry. The acquisition is the third big investment by Piramal Healthcare in a year as it tries to diversify its business.The transaction will be India’s biggest outbound acquisition since hospital chain Fortis Healthcare (India) Ltd. bought Singapore-based sister firm Fortis Healthcare International for $665 million in November, 2011.Since ,last few years Piramal Group was on a constant pressure as critics were accusing the group of losing focus in the pharmaceuticals business,ever since they sold their generic business to Abott Laboratories of US for $3.8 billion in 2010. Mr.Piramal handled this criticism by stating that generic business was sold as to become intellectual property and knowledge based business.
Rationale Behind Acquiring DRG :
When asked about the rationale behind acquiring DRG ,Mr.Piramal was found quoting that DRG is an intellectual property driven business and is knowledge intensive. DRG has growth rate of 20% in last five years. Another reason of acquiring DRG is , that it is one of the fastest growing companies in the healthcare information industry. The group regularly invests in drug discovery & development of products and to balance this they have acquired DRG with high margins and free cash flows that will balance their huge investments in drug discovery.
DRG is focused on three market segments: advisory services on drug utilization trends, database and analytical services that healthcare companies use to assess the current and future market opportunity for their products, and providing insights and data on the medical devices market.
It is speculated that the independent, objective, indispensable information from emerging markets is one of their greatest needs and Piramal’s experience in emerging markets is important since these markets are the primary avenues for growth in the pharma industry.
Following the completion of the DRG acquisition, Piramal Healthcare will operate this company as a stand-alone business, which will remain headquartered in Burlington in the US.
Other Pharma Buys by the Company :
In June 2010 it invested in Canada based company Biosyntech at Rs 35 crore for the therapy for Bio-orthopedic knee replacement surgery implant.
The drug maker, which specializes in contract manufacturing, over-the-counter drugs and drug discovery, purchased Molecular imaging portfolio of German ,Pharma giant Bayer AG in April 2012 at a price of $ 50m .This gives Primal to start with the rights to Florbetaben ,an in aging solution to treat & detect Alzheimer’s disease &some oncology molecules.
The group also plans to focus on broad areas:oncology ,inflammation, anti-infective , diabetes and metabolic disorders .
Focus on Drug Discovery Program ,Acquisition of BioSyntech and Bayer Molecular imaging business ,among all three, the common thread is intellectual property .
Only recently big companies in domain of Telecommunication & software like Nokia ,Motorola & Microsoft has admitted that only chunks of money is being made by the sales which is nothing in comparison to money made by enforcement of IP rights Like Patent.
So it can be inferred that Piramal Health Care is yet another example of company’s realizing the importance of IP as an asset for the company.