Israel's Teva Pharmaceutical Industries, the world's largest manufacturer of copycat patented drugs (generics), plans to invest over $1 billion in India to acquire Indian drug companies and set up greenfield manufacturing facilities.
The investment is planned for the next 24 months. Around $250-$300 million will be utilised for manufacturing facilities and the rest to fund acquisitions in India.
A few weeks ago, Teva had acquired over 100 acres of land near Gwalior, Madhya Pradesh, to set up active pharmaceutical ingredient manufacturing facilities that will match the production capacity of domestic generic majors such as Ranbaxy, Cipla, Dr Reddy's, Sun Pharma and Wockhardt, sources told Business Standard.
Sources said Teva would start civil works at the site after it obtains necessary government clearances.
"Teva considers India an interesting geographical region and is looking to broaden its activities in the country," Shir Altay, a company spokesperson said in an e-mail.
Teva is also likely to integrate Regent Drugs, which it acquired from JK Industries in 2003, with its API business.
Regent Drugs, now a 100 per cent subsidiary of Teva, manufactures some APIs that Teva requires for its global business. The company also sources APIs from many Indian companies. V K Batra, Managing Director, Regent Drugs, declined comment.
Teva has an Indian arm, Teva India, and a research and development centre in New Delhi which it started a couple of years ago.
Merchant banking sources said Teva has been aiming at a major acquisition in India for the past three years, but no deal has been struck yet, perhaps due to high valuations.
Targets include such drug majors as Cipla, Aurobindo, Matrix and Orchid, as well as Saraca Laboratories of Hyderabad.
India is an interesting geography not just for Teva, but for several global drug majors, which are attracted by the huge talent pool, scientific skills and cheap labour that has enabled Indian companies make drugs at about a third of the cost in the West.