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Apr 17, 2012

With Acquisition of Bayer Imaging R&D Portfolio, Piramal Continues Shift to Pharma IP

  • Indian-owned Piramal Healthcare took another step toward becoming a brand-name seller of drugs based on its own intellectual property through its acquisition of Bayer’s molecular imaging R&D portfolio.

    Neither of the companies disclosed the size of their deal, carried out through a newly created Piramal Healthcare subsidiary. Piramal Imaging said it foresaw $1.5 billion in annual revenue for the portfolio’s lead compound, florbetaben, a molecule used in Alzheimer disease detection.

    Piramal’s newly acquired portfolio includes patent, marketing, and distribution rights to florbetaben, which is in late-stage Phase III clinical trials, "as well as other clinical and preclinical assets of Bayer’s molecular imaging," the company stated. Piramal is expected to file for FDA approval to sell florbetaben in the U.S. during the fourth quarter of this year.

    In announcing the portfolio acquisition, Piramal announced positive results from the Phase III study, which showed that PET imaging with florbetaben reliably detected beta-amyloid deposition in brain tissue during life with great accuracy. Piramal said the results supported its view that florbetaben is a potential tool for diagnosis and assessment of Alzheimer disease. Piramal said it will present the first Phase III results on April 25 at the American Academy of Neurology’s annual meeting in New Orleans.

    “The new subsidiary will give focus to our activities in molecular imaging, which we think has a promising future,” Piramal Group chairman Ajay G. Piramal said, according to The Indian Express. “We will fund the buy through internal accruals.”

    Speaking with reporters, according to The Economic Times, Piramal noted his company’s shift away from producing branded generics, toward acquiring intellectual property and gaining more than a foothold in the branded drug segment by building IP. "Globally new products approvals are coming down; big pharma are focusing on personalized products," Piramal said.

    “We plan to build a promising portfolio in the pharma space, including our newly acquired molecular imaging assets, which will help us create a global branded pharma business,” Piramal said in the statement announcing the Bayer sale.

    The deal reflects what Bloomberg noted was growing interest by one-time generic drug companies in impacting the brand-name drug space, even as multinational drug developers have complained about weak patent protection in India—especially after last month’s decision by India’s patent office to revoke the exclusive patent rights held by Bayer to market its cancer drug Nexavar, and award the nation’s first-ever compulsory license to a domestic generic drugmaker—a decision that has sent shivers through big biopharma.

    Piramal Healthcare had revenues last year of $650 million, accounting for most of the $900 million in revenue generated by the Piramal Group conglomerate. The healthcare unit has grown at a compound annual growth rate of 29% since 1988.

    Core members of Bayer's R&D team working on the portfolio will join Piramal Imaging, which will advance the development of florbetaben by taking the molecule through regulatory approval processes worldwide.

    “This is another step forward for the company in basic research,” Sarabjit Kaur Nangra, vp, research, at Angel Broking, told the Indian Express. “PHL has been making investments in technology and in areas outside formulations, since they cannot enter that segment.”

    Piramal’s shift toward building its own pharma IP portfolio began in 2010, when the company sold its domestic formulation business to Abbott for Rs. 16,500 crore (at the time about $3.8 billion). As part of the deal, Piramal agreed not to compete with Abbott by re-entering the formulations market segment, Nangra noted.

    Also in 2010, Piramal shelled out $3.8 million to acquire the cartilage repair agent BioSyntech, a developer of biotherapeutic thermogel recently approved for sale in Europe.

    News of the Bayer molecular R&D portfolio being acquired initially sparked a 2.6% increase in Piramal’s per-share price Monday on the Bombay Stock Exchange, before shares closed down 1.45% to Rs. 443.80 ($8.62).

    --
    To read the story from Bloomberg, click here
    To read the story from The Wall Street Journal, click here
    To read the story from The Economic Times, click here
    To read the story from the Chicago Tribune, click here


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