Piramal Pharma To Acquire Hemmo Pharmaceuticals In All-Cash Deal
The acquisition will be done for an upfront cash consideration of Rs 775 crore.
Indian billionaire Ajay Piramal’s pharmaceutical business agreed to buy Hemmo Pharmaceuticals Pvt. in an all-cash deal, its third pharma acquisition this fiscal.
Piramal Pharma Ltd., a unit of Piramal Enterprises, has entered into an agreement to acquire a 100% stake in Hemmo for an upfront consideration of Rs 775 crore, according to an exchange filing.
After the acquisition, likely to be completed over the next four to six weeks, Hemmo will become the wholly-owned subsidiary of Piramal Pharma.
Hemmo is into developing and manufacturing peptide active pharmaceutical ingredients, and marketing these to drugmakers across domestic and global markets. Hemmo’s portfolio covers more than 30 APIs and custom synthesis services.
“This acquisition marks Piramal Pharma’s foray into development and manufacturing of peptide APIs, a capability that complements its existing service offerings,” the company said in the filing. “With the addition of Hemmo’s capabilities, Piramal Pharma will gain access to the growing peptide API market and enhance its ability to offer integrated services to customers globally.”
Hemmo has a manufacturing facility in Turbhe, Navi Mumbai, which is certified by the U.S. Food and Drug Administration along with an R&D facility in Thane that focuses on product development.
“During the past decade, peptide drugs have seen increased use in oncology, treatment of diabetes and obesity. The growth in therapies for rare diseases and orphan drugs has also increased the need for peptides,” Peter DeYoung, chief executive officer-pharma solutions at Piramal Pharma, was quoted as saying in the filing. “This acquisition enhances our ability to provide integrated solutions that our customers need and further expands ways in which we can help reduce the burden of disease on patients.”
While initiating coverage on Piramal Enterprises on Tuesday, Axis Securities said entry into domestic formulations business and demerger of the pharma business will be key rerating catalysts for the company. “With growth visibility across segments, we expect about 15% revenue CAGR over FY21-23,” the brokerage said in a note.
Shares of Piramal Enterprises closed 1.2% lower at Rs 1,745 apiece. All five analysts tracking the company recommend a ‘buy’, according to Bloomberg data. The average of 12-month consensus price targets implies an upside of 27.7%.