Among the major M&A deals this year, Nicholas Piramal's (NPIL) acquisition of UK's Avecia Pharmaceuticals for about Rs 76 crore is an example of a deal in the custom manufacturing space. Avecia provides custom chemical synthesis and manufacturing services for innovator pharmaceutical and biotechnology companies and the acquisition is expected to complement NPIL's operations on the global stage, according to NPIL chairman Ajay Piramal. NPIL is already supplying bulk formulations and eye products for companies like Allergen and Advanced Medical Optics.
The same is the case with firms like Matrix Labs, Jubilant Organosys and Hikal, who have acquired Docpharma (Belgium), Target (a US contract research organisation), and a Sinochem subsidiary in China respectively.
According to a FICCI study, custom manufacturing, along with contract research and co-marketing alliances, are the three new business models Indian pharma companies would be looking at in the new patent regime when they will be unable to launch products patented after 1995.
In fact, the enforcement of IPRs has encouraged MNCs to look at outsourcing more and more to India. Another advantage has been Indian companies' compliance with stringent USFDA standards and current good manufacturing practices (cGMP) guidelines, according to analysts.