Famy Care, the world's largest contraceptive pill producer based out of India, is planning to divest about 15 per cent of its stake to private equity firms to fund its expansion plans.
The company, which is fully owned by JP Taparia and sons Sanjeev and Ashutosh, has initiated discussions with four-five global private equity funds for the stake sale, sources said.
Famy Care had recently formed a strategic alliance with the third largest off-patent generic drug maker Mylan Laboratories of the US, to sell 22 women healthcare products in the US market by 2010.
Famy Care is one of the world's biggest producers of generic intra uterine device Copper-T and oral birth control pills such as Mala-D. The company also makes various contraception products such as injectables, tubal rings and emergency contraceptives, catering to a $7.5 billion global market for women reproductive health products.
“We have aggressive expansion plans to grow at about 35-40 per cent every year in the coming years and to foray into the developed markets. Discussions are on for dilution of stake, but so far nothing has been finalised,” said Sanjeev Taparia, managing director.
Sources said the company was close to acquire a domestic contraceptive manufacturer and was expanding its manufacturing facilities at Vapi in Gujarat, Daman and Goa conforming with the US Food and Drug Administration (FDA) and other global drug regulatory agency standards.
About Rs 100 crore has already been invested for the expansions, entirely through internal accruals. Strategy is to create a 'fund war chest' for inorganic growth and for other capital expenditure in the coming years, said Ashutosh Taparia, executive director.
Famy Care and Mylan plans to file about 22 abbreviated new drug applications with the US FDA, targeting the US oral contraceptive market worth $3.3 billion.
About 50-55 per cent of this constitute generic products. Currently, Barr Pharmaceuticals, which was acquired by Teva Pharmaceuticals, and Watson Pharmaceuticals of the US are the only major generic female healthcare players in the US market.
As per the strategic alliance with Mylan, Famy Care will manufacture the products in India and Mylan will market the products in the US. Shipments will start from 2010. Mylan also has Right Of First Refusal for launching these products in the Japan and Australian markets.
Sanjeev Taparia said the company was also planning to soon foray into the European market, which constitutes 27 countries. Famy Care will enter into these markets through strategic alliances with various companies operational in these countries.
The company is also planning to launch a new range of complex technology high value generic products for women health. It would also ramp up the research and development centre in Mumbai, now employed with about 80 scientists, said the managing director.
Source: Business Standard