himani.singh@icicidir ect.com Nicholas Piramal (NICPIR) Lucrative ...

COMPANY BACKGROUND
Nicholas Piramal (India) Ltd (NPIL) is one of the
country’s largest pharmaceutical companies. The
company is currently ranked 4th in the Indian market
with a diverse product portfolio spanning nine
therapeutic areas. The company has R&D capabilities in
custom chemical synthesis, process innovation, NDDS
and basic research. It has world-class US FDAapproved
formulations and API facilities. NPIL has a
long track record of successful collaboration with
innovator companies. Since 2003, the company has
made significant investments to become a global
contract manufacturing organization (CMO) for large
and medium-sized innovator companies. NPIL has a
track record of buying depressed assets (See Exhibit 2)
and turning them around. It bought loss making Avecia
in 2005 and Pfizer’s Morpeth facility in 2006. NPIL
provides CMO from assets in India (Pithampur in
Madhya Pradesh and Digwal near Hyderabad) and
abroad. The Avecia and Morpeth facilities in UK also
provide CMO. The acquisition of Morpeth plant from
Pfizer helped the company to secure an order worth
US$350 million spread over 5 years.
Exhibit 3: Business Model
Shareholding pattern
Shareholder Percentage holding (%)
Promoters 49.97
Institutional investors 23.39
Other investors 26.64
General public 11.50
Exhibit 2: Chronology of NPIL’s buyouts
Nicholas Piramal: Rs 2472 crore in FY07
Domestic: Rs 1407 crore (57%) Overseas: Rs 1065 crore (43%)
Formulation: Rs 1174 crore (83%)
Contract Mfg: Rs 8 crore (0.5%)
Path Labs: Rs 69.50 crore (5%)
Others: Rs 81 crore (6%)
Year Acquired company Rationale
1988 Nicholas
Laboratories
Pharma sector entry
1993 Roche Products
Portfolio expansion,
access to new products
1996 Boehringer
Mannheim India
New business line -
Diagnostics
2000 Rhone Poulenc India
Size; Portfolio expansion
with new therapy areas
2002
ICI India - Pharma
business
Strong presence in
Cardiovascular therapy
area
2003
Sarabhai Piramal
Pharmaceuticals
Therapy area leadership
in CNS, pain management
& respiratory
2005
Rhodia, UK,
Inhalation
Anesthetics
Entry into niche, global
branded generics market
Expansion of global
2005 Avecia, UK
footprint, new capabilities
& technologies
Manufacturing Key relationship with
2006 facility of Pfizer in Pfizer, world class facility
UK
of patented products
PDS: Rs 146 crore (14%)
PMS: Rs 665 crore (62%)
MMBB: Rs 227 crore (21%)
Others: Rs 27 crore (3%)
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