Meiji Group Announces $290 Million Acquisition Of CMO Medreich
Meiji Holdings’ pharmaceutical division has announced that it has purchased Bangalore-based Medreich. The deal will cost the company $290 million. Meiji, which manufactures therapeutic drugs for the central nervous system, as well as anti-infection drugs and generic drug products, expects that this deal will expand its generic drugs portfolio and help the company become more prominent in India.
Medreich primarily manufactures pharmaceutical preparations in the anti-fungal, cardiovascular, penicillins, diabetes, and respiratory categories. Medreich has already worked with most of the major multinational pharmaceutical corporations, including GSK, Pfizer, Sanofi Aventis, Wyeth, Adcock Ingram, Mylan, and Actavis. Medreich’s client base reaches 54 different countries.
Meiji’s acquisition of Medreich is another Japanese move into the Indian pharmaceutical sector. A similar move happened in 2008 when Japanese company Daiichi Sankyo acquired a 63.9 percent majority state in Ranbaxy Laboratories for $4.2 billion. However, Ranbaxy has since run into issues with the FDA. Daiichi recently sold its stake in the company to Sun Pharmaceutical for $3.2 billion, setting Sun Pharma up to become the fifth largest generic drug maker in the world.
India is one of the world’s largest generic drug markets, and the market is expected to see continued growth in the coming years. Indeed, Live Mint cites research firm Lucintel, which has forecasted the generics drug market will reach $335 billion globally by 2017.
Sujay Shetty, the executive director of pharmaceuticals and life sciences at PWC India, a consulting firm, told Live Mint, “Acquiring stakes in Indian pharmaceutical firms not only provides access to Indian markets but also allows Japanese firms to gain expertise in generic drug manufacturing. Also, as a part of the economic cooperation agreement between India and Japan, more Japanese firms will exhibit interest in Indian pharma companies. Not only will it help Japan in bringing down its ballooning healthcare expenditure but also strengthen the economic relations between the two countries.”