Pharma companies expecting favourable outcomes on Indo-US deal makings.
The current scenario states that 2017 may be promising for pharma business activities from India to the US, given that US estimations have significantly corrected and many US-based acquirers are lacking financial support. India since many years is offering competitive advantages to US pharma as a development and manufacturing base for generics and as it has large number of USFDA approved sites linked with low capital expenditure and operational costs.
The recent change in FDI regulations also shows good outcome for deal sentiment, the report says as brownfield investments of up to 74 per cent which increased from 49 per cent earlier, are now allowed under the automatic route. A report suggests that the presents domestic pharma firms with a much- needed opportunity to step in and close portfolio gaps at reasonable prices. At the domestic level, the report observes consolidation attempts gathering momentum despite increasing price controls and lack of products development.
Despite the increasing protectionist tendencies in the US, domestic pharma sector, which saw 51 deals worth USD 4.6 billion in 2016, is cautiously optimistic about the inbound deals from the American shores in the year 2017. Statistical analysis depicted that the outbound and domestic transactions lead most of the deal activity in 2016, with 21 deals each. In terms of disclosed deal value, the deal value was USD 2.1 billion each. And on deal value of USD 342 million, of which 4 deals of USD 272 million were alteration ones