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January 18, 2004

Why Pharma is hotting up

The pharmaceuticals sector has been witnessing mega-deals in recent quarters: Indian companies have been acquiring overseas firms and attracting dollops of private equity investments.

According to an article in Business Standard, the key driver for these deals the fact that market for generics is "all set to explode" with drugs with sales worth $80 billion set to go off-patent over the next few years. "This is the opportunity that several Indian drug companies want to grab with both hands. Three decades of reverse-engineering patented medicine has given them formidable technological skills in the generics space," the article says.

"The smaller companies are looking at becoming suppliers of generic products to overseas companies. But the giants are going a step further and want to market generic products themselves. This is where overseas acquisitions fit in," it adds

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