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Nicholas Piramal Adopts New Corporate Image, Outlines Plans for Research Entity

12 Mar 08

Indian drug-maker Nicholas Piramal has taken on a new corporate image as it looks to consolidate its divisions, list its R&D unit, foray into the rural healthcare market, and expand its overseas presence.

Global Insight Perspective
Significance	The firm's rebranding exercise will see a new image for the company's pharma firm, laboratories and diagnostics unit, and recently spun-off R&D entity. The latter garnered valuations in the range of US$480-540 million prior to the proposed initial public offering (IPO).
Implications	The new image encapsulates the company's drive to consolidate its 14 divisions under a more distinctive setup. Its decision to list the R&D unit is expected to rouse interest from Big Pharma firms in terms of research alliances.
Outlook	Nicholas Piramal's plans mark an attempt to raise its international profile, seeking to establish itself as a generics player with a drug discovery interest. In the short to medium term, the Indian firm is likely to accelerate efforts to widen its presence in Europe and devise a strategic focus in the domestic rural healthcare market.

Indian pharma firm Nicholas Piramal has adopted a new corporate image in its 20th year of operations in the pharmaceutical business. The key elements of the development are as follows:.

Nicholas Piramal India Ltd (NPIL): The company's flagship pharma firm is to be renamed Piramal Healthcare Ltd. NPIL recorded annual revenues of US$602 million in FY 2006/07 and is in the top-five pharma firms in the domestic pharma space.
NPIL Laboratories and Diagnostics: The subsidiary of NPIL is a consolidation of Wellspring and Dr Phadke's Path Labs businesses. This entity is to be renamed Piramal Diagnostic Services.
R&D Unit: The new demerged unit consisting of only the drug discovery operations from NPIL is to be called Piramal Life Sciences Ltd. The unit is focused on four therapeutic areas—cancer, diabetes, inflammation, and infectious diseases—with four experimental compounds in different stages of clinical trials. The company has secured agreements with Eli Lily and Merck & Co. (both U.S.) for conducting research.

Plans for Expansion and Partnerships

Piramal has outlined plans to invigorate its rural healthcare presence. The company is set to invest in establishing a healthcare fund that will finance business ventures in the private hospital sector and its allied industries. It also hopes to expand its pathology and diagnostic services, and is looking to open 40 new sites shortly. Meanwhile, the company is also planning to tap the capital market for its demerged R&D unit, and has been provided with three valuations from Lehman Brothers, Enam, and Kotak—all between US$480 million and US$540 million, according to the Press Trust of India. The company is also looking at private equity investments into the new unit. Piramal Life Sciences is scouting for partners to diversify and expand its drug discovery business going by the success of earlier agreements with Merck and Eli Lilly.

Outlook and Implications

The rebranding exercise is primarily aimed at unifying its 14 business units. It is interesting to note that in this new corporate image, a conscious attempt is made to do away with the name "Nicholas", which it adopted following the acquisition of Nicholas Laboratories in 1988, marking its foray into pharmaceutics. The company has a strong brand in the domestic market, expected to be firmly established under the new corporate image-building exercise.

Even after hiving off the research unit, Piramal Healthcare is expected to garner strength from its generics and customs synthesis business. The company has a sizeable presence in the domestic pharma market, with some industry-watchers ranking it fourth after Ranbaxy, Cipla, and GlaxoSmithKline (GSK; U.K.) in terms of market share and value. The customs manufacturing, nutritional, and herbal products portfolio and its formulations businesses remain the mainstay in terms of operations. The new research firm's valuations, if realised, will catapult Piramal into the big league of Indian research pharma majors, wherein Ranbaxy, Dr Reddy's Laboratories, Sun Pharma, and Glenmark have created a niche. The company has 14 compounds under development, with four currently in clinical trials. The private equity investment and its successful agreements with Merck and Eli Lilly will create interest among Big Pharma players to extend research deals, thereby raising the international profile of Piramal Life Sciences.

Related Articles

India: 4 January 2008: Nicholas Piramal to Create New Corporate Image
India: 4 December 2007: Nicolas Piramal R&D Activities Make Progress, Acquisition Plans Intensified
India: 31 August 2007: Nicholas Piramal Demerges R&D Units

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