Swiss MNC Roche, drug manufacturer, eyes acquisitions in India

Swiss multi-national drug manufacturer, Roche Holding AG, announced that it intends to invest in the acquisition of diagnostic equipment makers and innovative diagnostic products in India. The Swiss giant said it would undertake the Indian investments through its subsidiary, Roche Diagnostics; in an investment acquisition that marks the drug makers first such move ever since the beginning of its operations fifty years ago.

The Chairman and managing director, Roche Diagnostics India, Bhuwensh Agarwal, said the company was currently willing to make acquisition investments and financing might not be a hindrance for its plans; adding that the company’s strategy aims at adding diagnostic tools that are vital in the treatment of ailments endemic to India such as tuberculosis, malaria, heart diseases and diabetes. Even so, he was quick to point out that Roche Diagnostics had not set any deadlines on the investments and is currently evaluating available opportunities.

Roche Diagnostics records an estimated per annum revenue earnings of over Rs 43,500 crore and its Indian operations contribute less than 5% of its global turnover. Thus, the company plans to invest in expansion operations that will see it set up bases in China and India to tap into the two countries’ markets that are growing at over 15% compared with the global average of 4%.

Agarwal pointed out that Roche Diagnostics has been slightly hindered in its investments by the Indian patent protection system, which, according to him, needs improvements. Agarwal noted that the Indian diagnostics market currently stands at worth Rs 1,800-2,000 crore, signaling an increased growth course, as advanced diagnostic tools are gaining acceptance even in Tier-II and Tier-III cities.

Out of India’s approximately 140,000 diagnostics labs, less than 2,000 are computerized and about 150 only have certification from the National Accreditation Board for Testing and Calibration.

Roche Diagnostics India gets about 70% of its earnings from hospital related diagnostics tools and has increased its headcount by 20% to 50% in the last three years, in its bid to meet demand arising from emerging cities in the country.

The Indian market has over time been expanded by the presence of other companies such as SRL Ranbaxy, Metropolis, Lal Pathlabs and Thyrocare, added Agarwal. In order to bolster their businesses, a majority of the diagnostics equipment suppliers in India currently focus on rental partnerships with diagnostic labs because this way, the labs have time to pay for the costly equipment, depending on the business generated.

Roche Diagnostics exited India in mid-1990s by licensing its products to Nicholas Piramal and re-entered the country in 2002 with its own set-up, terminating its earlier alliance with the Indian company.

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