Dabur Pharma ties up with Abbott Labs

By siliconindia staff writer   |   Wednesday, 22 October 2003, 07:00 Hrs
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NEW DELHI: After a year of hectic negotiations, Dabur Pharmaceuticals, the newly demerged company of Dabur India, has struck an exclusive strategic alliance with the $18-billion Abbott Laboratories of the US.

According to the agreement, Abbott will market Dabur’s anti-cancer drugs in the lucrative US market. The drugs will be developed and manufactured by Dabur’s facilities in India and the UK.

But, what is unique about this tie-up is the upfront payment which Dabur will receive — touted to be “unusual” for any such marketing tie-up. “Our strategic alliance with Abbott is for 10 years. The entire project will be managed by a joint management committee which will comprise of representatives from both Dabur and Abbott,” Anand Burman, vice-chairman, Dabur India, told Economic Times, a business daily in India.

Dabur was earlier negotiating with some of the Indian pharma majors including Ranbaxy for marketing alliance for its anti-cancer drugs. “Our new business model revolves around expanding the oncology business to the international level and beefing up the generic business in India. We have a leading position, as well as brand strength in oncology segment in India and want to be a niche player in this segment internationally,” said Burman.

According to him, the tie-up will catapult Dabur Pharma to a significant position in the US as the market for anti-cancer formulation is slated to touch $15bn by ’10 with the US accounting for half of it. The deal is significant for Dabur Pharma because it has been reduced to a small company of Rs 163 crore post-demerger. But the new agreement will help Dabur leverage its strong oncology portfolio in the US. Abbott controls a significant share of the US hospitals market and through its gigantic marketing network, Dabur hopes to increase its turnover 10 times. But it has to fight the other big guys in the anti-cancer domain like Gensia Sicor, Ivax and Eli Lilly.

Both Dabur and Abbott will invest considerably in the entire project. Dabur Pharma is planning to raise between Rs 100-125 crore for its demerged pharma business through the private equity route. The funds will be used to drive the company’s plans for its pharma business.

Dabur pharmaceuticals consist of the bulk and formulations businesses (oncology and non-oncology) and Dabur Oncology, a UK-based company. Dabur India had operationally separated pharma from the FMCG business last July on the advice of consultancy firm Accenture

(Source: Economic Times)

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