Abstract:
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In January 2007, Mylan Inc. (Mylan), one of the largest US
generic drug makers, acquired a 71.5 percent stake in Matrix Laboratories Ltd.
(Matrix), India, a leading Active Pharmaceutical Ingredients (API) supplier
globally, for a cash and stock deal of US$736 million. The Mylan-Matrix deal was
the largest acquisition in the Indian pharmaceutical industry and was viewed by
analysts as a step toward backward integration for Mylan. The deal not only gave
Mylan access to a low cost manufacturing platform, but also immediate presence
in the emerging markets of Asia and Africa as well as the lucrative generic
drugs markets in Europe.
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Matrix, on the other hand, gained the
much-needed scale that generic companies required to survive in
a very competitive market place. It was very important for
Indian pharmaceutical companies considering that these companies
did not have research molecules of their own.
Analysts felt that with the global generic drugs industry
undergoing a consolidation phase, large pharmaceutical companies
were eyeing Indian pharmaceutical companies as potential targets
of M&A deals. This was because, with considerable pricing
pressures in the US, these companies were on the lookout for
low-cost suppliers.
In addition to the low-cost manufacturing platform, the
attractiveness of the Indian companies stemmed from the fact
that they had large and varied product portfolios and
world-class manufacturing facilities. Indian pharmaceutical
companies also had a number of Drug Master Files (DMFs) and
Abbreviated New Drug Application (ANDA) filings in the US, the
world's largest market for pharmaceuticals. Moreover, some of
these companies had developed a significant presence in the
European and African markets through the inorganic route.
Issues:
» Understand the issues and challenges in the global generic
dugs industry, with special reference to the pharmaceutical market in the US and
India.
» Understand the reasons behind an the US-based Mylan, Inc.'s foray into the
global market, in the backdrop of the challenges it faced in the US market.
» Understand the issues and challenges faced by an Indian pharmaceutical company
in growing its business in the international market.
» Understand and appreciate the role of mergers and acquisitions as a growth
strategy.
Contents:
Keywords:
Strategy, Competition, Merger & acquisition, Global
expansion, Growth, Product portfolio, Supply chain, Backward integration,
Generic drugs industry, Contract manufacturing, Pharmaceutical, Management,
Restructuring, Mylan, Matrix, Teva, Sandoz, Barr, Actavis, E Merck, India, Low
cost
Benefits Beyond Global Expansion
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