PAG backs acquisition of India's Optimus Drugs
PAG has supported the acquisition of Optimus Drugs for an undisclosed sum alongside CX Partners and Samara Capital as part of a joint Indian pharmaceuticals platform play.
The deal values Optimus at around INR 20bn (USD 259m), according to The Economic Times. PAG participated via its third pan-Asian fund, which closed at USD 6bn in late 2018.
This is the second acquisition by the three-way platform's API-focuses entity, Sekhmet Pharmaventures. The aim is to establish a best-in-class hub for the development and production of bulk drug-making chemicals, known as active pharmaceutical ingredients (APIs).
The first investment was Anjan Drug in 2020. The consortium reportedly paid USD 70-80m for a 70% stake in the business, which supplies APIs for drugs that target conditions related to the central nervous system.
“The businesses of the two companies are highly complementary and will provide a solid foundation for the platform to make further acquisitions,” PAG said in a statement.
Optimus exports a catalogue of more than 100 dug products to 40 countries. In addition to APIs, this includes finished drugs and drug intermediates, which are raw materials sometimes used in R&D. Nikhil Srivastava, PAG’s head of India private equity, described the company as “a clear leader in R&D, manufacturing, and intellectual property management.”
Downstream suppliers in India’s pharmaceuticals industry have enjoyed increased attention from private equity in recent years. The momentum is attributed to the US Food & Drug Administration (FDA) setting up an Indian office in 2008 and subsequently diving deeper into compliance issues. The country now has the most FDA-approved drug factories outside the US.
Meanwhile, the domestic API niche has seen outsized traction as China’s pollution control measures have chipped away at its dominance as a global exporter in the segment. India’s API market was said to be worth about USD 12bn in 2021 and set to grow at about 12% a year through 2027.
As of year end-2021, PAG has invested more than USD 580m in private equity deals in India, including the recent acquisition of drug production services provider Acme Formulation for USD 145m. Acme focuses on products such as sterile injectables, hormones, and other complex oral solid formulations.
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