Solar Pharmaceutical Industries Ltd, Cipla Ltd, and Dr Reddy’s Laboratories Ltd which have a robust US focus are hanging fewer acquisitions and partnerships as they search for new markets, in line with trade consultants. Then again, pharma firms with a robust India focus have ramped up their dealmaking.
In July, Torrent Prescribed drugs Ltd acquired a 46.39% stake in Mumbai-based JB Chemical substances and Prescribed drugs Ltd for ₹11,917 crore. In October final yr, Mankind Pharma Ltd purchased Bengaluru-based Bharat Serums and Vaccines Ltd for ₹13,768 crore.
However Solar Pharma, Cipla, and Dr Reddy’s—which derive 30-45% of their income from promoting largely copycat or generic medication to the US—are using a extra measured and gradual method at the same time as they sit on massive piles of money. Torrent and Mankind earn 51-55% of their enterprise from India.
As of March, Solar Pharma had internet money of about ₹27,523 crore (roughly $3.1 billion) on its books. Cipla had ₹10,369 crore, and Dr Reddy’s had ₹2,454 crore.
Whole Indian pharma dealmaking this yr until the top of September added as much as about $2.6 billion throughout 28 offers. In all of 2024, mergers and acquisitions by Indian drugmakers totaled $4.1 billion throughout 29 offers.
In relation to the US generic medication market, firms have turned cautious about investing to develop their capability or purchase belongings, mentioned consultants.
“Generic firms in India have created massive manufacturing capacities. However, sadly, these capacities haven’t created worth for them,” mentioned Vishal Manchanda, pharma analyst at Systematix Group, an funding advisory.
“What has occurred over time is that US rules have gotten stricter and stricter, which has translated into larger spending (capital and operational expenditure) in the direction of upgrading the standard infrastructure and automation in manufacturing,” he added. “Whereas prices went up, generic drug pricing within the US chased new lows yearly… Indian gamers incrementally have grow to be selective of their capex spends.”
Additionally, whereas US President Donald Trump’s just lately introduced import tariffs on prescription drugs exempt generic medication and are unlikely to make a giant dent on dealmaking in India, the brand new levy may decrease valuations for non-US belongings, Manchanda mentioned.
“US generics is a commodity like enterprise,” added Prashant Nair, pharma analysis analyst at Ambit Capital.
Timelines for US drug regulatory approvals have shrunk from 4 years a decade in the past to 12-18 months, permitting new gamers to enter however making the market inclined to cost erosion, he mentioned.
“Corporations (Indian drugmakers) have had unhealthy experiences previously with belongings they purchased at very excessive multiples, which didn’t play out nicely when the cycle turned downward. Shares acquired penalized when it comes to valuations as nicely. In order that’s the explanation why they’re much more cautious now on this market,” mentioned Nair.
Key Takeaways
Strategic divergence is shaping the sector: India’s pharma trade reveals a cut up path—aggressive enlargement by domestic-focused gamers versus measured, innovation-driven development by export-heavy giants, highlighting differing danger appetites and market priorities.
India-focused pharma corporations are main dealmaking: Corporations like Torrent and Mankind are aggressively buying stakes and partnerships to develop portfolios, achieve scale, and entry key therapies within the home market.
Large US-focused drugmakers are cautious: Solar Pharma, Cipla, Dr. Reddy’s, and Zydus are holding again regardless of massive money reserves, citing regulatory prices, pricing pressures, and previous overvalued acquisitions as causes for selective dealmaking.
Horses for programs
Between 2021 and 2025, greater than half the offers struck by home pharma firms have been India-focused, present information shared by Grant Thornton Bharat.
A few of these offers have been geared toward gaining scale (the Torrent-JB Chemical substances deal, as an illustration). Some others have been struck to both achieve entry to key therapies (e.g. Eris Lifesciences Ltd acquired the India-branded formulation enterprise of Biocon Biologics for ₹1,242 crore in March 2024) or expertise (such because the Mankind-Bharat Serums deal).
“It’s a mixture of small and bigger dimension belongings. It is determined by what the target is,” mentioned Ambit Capital’s Nair. “For instance, in India, if there’s a giant asset obtainable, most firms would take a look at it as a result of it’s a market that they perceive very nicely. Plus, it’s a branded enterprise, so [it would be] much more sustainable. This provides consolation to deploy extra capital in such belongings.”
In the meantime, firms like Solar Pharma, Cipla, and Dr Reddy’s, are using a special method. Whereas they wish to derisk their enterprise and diversify away from the risky US generic medication market, they’re ready for the suitable belongings to make massive bets, in line with trade consultants.
Solar Pharma, Dr Reddy’s, and Cipla didn’t reply to Mint’s queries.
In January, Dr Reddy’s mentioned throughout a press briefing that it might concentrate on constructing a pipeline of complicated medication, corresponding to weight-loss drugs, and biosimilars, that are just like and usually cheaper than an unique organic drug that’s comprised of residing organisms.
The Hyderabad-based drugmaker has signed a number of partnerships to strengthen its portfolio in key therapies. It just lately acquired anti-vertigo model Stugeron from Belgium-based Janssen Prescribed drugs for $50.5 million (about ₹450 crore) to develop its portfolio in rising markets, together with India.
In September 2024, Dr Reddy’s acquired UK-based Haleon Plc.’s international portfolio of nicotine alternative remedy manufacturers, outdoors of the US, for £500 million (almost ₹6,000 crore).
Solar Pharma, however, is seeking to purchase modern belongings from biotech corporations because it seeks to remodel into a world specialty pharma firm, mentioned trade consultants. Earlier this yr, it acquired US-based immuno-oncology firm Checkpoint Therapeutics for $355 million (about ₹3,150 crore).
“The most effective novel drug concepts get curated in educational establishments, which biotechs take up for improvement and the worldwide pharma innovators commercialize them. Solar Pharma is actually following the same mannequin as a world innovator with concentrate on sure therapies (oncology and dermatology),” mentioned Manchanda of Systematix Group.
Some drugmakers are hanging offers to diversify into new segments.
As an example, Zydus, as a part of rising its concentrate on medtech, purchased French medtech agency Amplitude Surgical earlier this yr for €256.8 million (about ₹2,650 crore). And Cipla, which has a robust India enterprise, has been chasing small-ticket acquisitions and licensing partnerships in client manufacturers and key therapies.
“They [Cipla] don’t need to kill the money they’ve with them,” mentioned Manchanda. “They’re going gradual. They’re ready for the suitable alternatives to come back.”
