Alkem Laboratories set for European debut

In its debut in the world's second largest pharmaceutical market, Rs 750 crore Alkem Laboratories has zeroed in on a European generic company for acquisition.

The company's expected investment in the European buy may range from $25 million to $30 million (about Rs 100 crore to Rs 135 crore).

"Alkem had shortlisted three generic companies in the European generic space. Negotiations with one of the companies, based in the UK, is in the final stages. The deal is likely to be signed shortly," said sources.

Alkem is currently one of the top ten players in the domestic pharmaceutical market with only less than 10 per cent contribution from exports.

With the proposed acquisition, the company expects the export revenue to touch more than 25 per cent of Rs 1,000 crore sales targeted by end of this financial year, the sources said.

Currently, it is on an expansion spree with the thrust on strategic alliances and partnerships with international pharma majors.

Early this year, the Israel-based multinational Taro Pharmaceutical Industries had struck an outsourcing deal for formulations development and supply contract for its US and other markets with Alkem, a leading player in antibiotics and antibacterial segments and nutraceutical space in India.

Taking a different route, the company is in the process of venturing into food FMCG sector by floating a separate strategic business unit from its stable.

Initially, the focus will be on sweeteners and health food market. The company has already tied up with distribution major Muller & Phipps India for nation-wide distribution. Alkem will invest Rs 35 crore to 50 crore in the first phase in the new venture.

For this purpose, Alkem has already set up India's first sucralose, a sugar-free and heat-stable sweetener, manufacturing plant at an investment of Rs 60 crore. The plant with 120 tonne capacity is located in Mandwa in Gujarat. It is scouting for supply alliances for sucralose globally.