Financial Daily from THE HINDU group of publications
Monday, Apr 25, 2005
Mergers & Acquisitions
Iceland co acquires Bangalore CRO Lotus Labs
Bangalore , April 24
IT could be a sign of things to come in the country. Lotus Laboratories, the Bangalore-based contract research organisation, has become the first domestic CRO to be acquired by a foreign company.
Lotus Labs was bought by Icelandic generics major Actavis in a euro 20-million all-cash deal towards the end of March this year.
Lotus will continue to function independently with its existing clients and also do all biostudies for Actavis which has marketing and production footprints in major pharma markets Europe, the US, Japan and Bulgaria among others, Mr Sudhir J. Pai, Managing Director and Chief Executive Officer of Lotus Labs, told Business Line.
Lotus, set up four years back by a team of five technopreneurs including Mr Pai, became the biggest domestic CRO, more than doubling its turnover to Rs 27.5 crore for the latest fiscal.
With a clutch of 32 clients in India and abroad and with Actavis planning 50 biostudies for its US and UK drug clientele, Mr Pai said Lotus was expected to again double the turnover during 2005-06.
There is an increased activity in the global clinical research area and it is India that MNCs are looking at, for outsourcing their needs, for investing in captive or third-party outfits or for outright acquisitions. Mr Pai said until 6 months back, there were five interested buyers wooing Lotus.
The trend for CRO acquisitions is increasing and many pharma companies are said to be considering India for such strategic investments. However, only a handful of the nearly 100 registered CROs meet the global standards.
For the impending additional activities, the 200-bed Lotus plans to add about 30 staff to the existing 250, add 50 beds more and acquire some more space and equipment at an estimated Rs 15 crore.
"This will tilt our current business proportion of 80 per cent domestic and 20 per cent overseas activity to perhaps 45-55 per cent," Mr Pai said.
Biostudies are the comparative efficacy tests done with a generic product and the incumbent product that is going off patent. Lotus has been doing comparative biostudies for vaccines, cardiovascular drugs, neurology and cancer products.
It is doing studies prior to regulatory submissions in the US, got into phase 3 trial work last year and expects to sign a couple of US contracts soon, he said.
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