Client Challenge
The client is a part of a leading business group with interests in IT software and hardware. The client has expressed interest to enter the pharmaceutical generics segment as a part of its diversification strategy. The client is considering acquiring a strategic stake in a company offering an attractive growth potential over the medium term. The top management was faced the following key questions considering the changes in the pharmaceutical sector:
- Which opportunities are likely to emerge for Indian companies?
- Which companies are best positioned to benefit from the opportunities?
- Which company should be considered for acquiring a strategic stake?
Our Approach
UC Strategy conducted extensive primary and secondary research on the changes in the pharmaceutical sector, taking the following steps:
- Met industry associations, regulatory authorities, leading pharmaceutical companies and industry experts and analysed industry research reports
- Analysed the opportunities and key issues facing the pharmaceutical sector
- Based on the analysis, the team identified the need to answer 3 key questions –
- Which generic segment is attractive in the pharmaceutical value chain?
- Classified the industry players into 3 categories based on their position in the value chain viz. bulk drugs, formulation and composite player
- Analysed the aggregate revenue and profitability characteristics of each category and identified the attractive category of the players
- Which therapeutic segments are likely to grow?
- Analysed the number and value of drugs going off-patent in each therapeutic segments globally, over the next 10 years
- Determined the existing size and growth potential of each segment based on disease proliferation
- Identified the top 9 attractive therapeutic segments
- Which company is well poised to take advantage of the evolving landscape?
- Based on the emerging opportunities e.g. contract research, contract manufacturing, marketing etc., identified an ideal business model poised to take benefit of the evolving landscape
- Which generic segment is attractive in the pharmaceutical value chain?
- Further prioritised and shortlisted companies on the indications of their willingness to divest
- Facilitated an initial round of meetings between the client and the prospect
- Defined a strategic road map for acquisition
Our Impact
The client received a shortlist of potential companies on the basis of turnover and equity holding pattern, presence in top therapeutic segments, strategic focus, existing operations and management quality from a long-list of about 2,500 companies. UC Strategy recommended 4 companies as priority companies to initiate a dialogue with, out of the 9 shortlisted companies.