www . biospectrumindia . com | November 2017 | BioSpectrum
BIOAnalysis
37 being made available for manufacturing by Gland Pharma and introducing them to the Indian market . Furthermore , the partnership will create new channels to sell the products of Gland Pharma in markets where Fosun has an existing presence .”
The deal , once materialized , will help the Chinese company make inroads into India , gain access to US injectable drug market where Gland has a firm hold and bolster its product portfolio with new oncology drug pipeline . However , this scaling of the great wall by Fosun , wasn ’ t easy . The deal did not get a nod from the Cabinet Committee on Economic Affairs ( CCEA ) and Fosun had to settle with a smaller stake of 74 per cent . But wait , did Fosun actually lose much ? Except for a small stake ?
The original deal was approved by the Foreign Investment Promotion Board ( FIPB ) earlier this year , while the Competition Commission of India approved it earlier in December 2016 . FIPB referred the deal to CCEA in April . India allows foreign investment of up to 100 per cent in its pharmaceutical sector but above 74 per cent requires government approval .
Following these approvals , the deal , however gathered dust at the CCEA , and the Indian authorities sat on it , giving no word to both the companies on the acquisition . There was a wide speculation and media reports that the deal would be ‘ blocked ’ amid heightened border tensions between the two countries .
Fosun then decided to take the by-pass route and trim its stake to 74 per cent . With this , Fosun no longer needed the approval of Indian government as per the revised Indian Foreign direct investment ( FDI ) guidelines . Fosun said in a statement that the reduced stake will avoid a government review and the transaction was completed by October 3 with all the main conditions being met . “ The approvals of the relevant [ Chinese ] authorities and the United States
The partnership will leverage synergies as foreseen by the management teams of both Gland Pharma and Fosun Pharma . Some of these synergies include the biosimilar programme developed at Fosun being made available for manufacturing by Gland Pharma and introducing them to the Indian market . Furthermore , the partnership will create new channels to sell the products of Gland Pharma in markets where Fosun has an existing presence .
“ There is a huge opportunity in the injectable industry . In the US alone , over 20 billion injectable drugs are expected to expire in next 5-6 years . Owing to these prospects the market has attracted large pharmaceutical firms to look for expanding in injectable business either by acquisition or through strategic partnership . For example , Mylan , acquired the injectable business of Strides Shasun Ltd in 2013 , several other pharma companies such as Baxter , Torrent pharmaceutical etc . are also looking to increase the investment in this segment . Gland pharma is one of the leading developer and manufacturer of generic injectables , which is strategically based in India . Several of its manufacturing facilities are approved by USFDA . Also , a majority of Gland Pharma ’ s business comes from the US . Therefore , if Fosun collaborates with Gland Pharma , it will have instant access to the US market as well as several other semi-regulated markets .” -Sanjeev Kumar , Industry Manager , Transformational Health : Life Sciences , Frost & Sullivan
antitrust filings and Indian antitrust filings in respect of the transactions have been completed ,” Fosun Pharma said in its filing .
“ No review and approval of the India Foreign Investment Promotion Board and the Cabinet Committee on Economic Affairs of India is required in relation to the transactions contemplated under the amendments to the transaction documents under the relevant Indian foreign investment policies ,” the company said .
Why was Fosun so determined ?
Found in 1978 , Gland Pharma , makes generic injectables , primarily for export in the US market . The company also sells its products in India and has presence in 90 countries , over five continents . With this deal , Fosun gets access to two state-of-the art R & D laboratories , four US Food and Drug Administration ( FDA ) ( USFDA ), Medicines and Healthcare products Regulatory Agency ( MHRA ) approved manufacturing sites , 60 + niche injectables and a growing oncology pipeline . The deal will thus help the Chinese drug maker to leverage capabilities and expand its product