Nicholas Piramal in fray for Cambrex

BANGALORE: The Bid for Cambrex, a New Jersey-based life sciences company, could become an India affair. The country’s fourth-largest pharmaceutical player, Nicholas Piramal, is expected to be in the fray, which has already attracted another domestic peer Jubilant Organosys.

Informed sources said the Rs 1,450-crore Nicholas Piramal India (NPIL), along with Jubilant, could be the front-runners to acquire the NYSE-listed company with revenues in the vicinity of $450m from three segments — human health, bio-products and bio-pharma. When contacted, an NPIL spokesperson declined to comment.

It is learnt that the loss-making Cambrex has mandated Bear Stearns & Co to consider strategic alternatives, though the exact contours of deal-making are not clear. Sources said Cambrex could be veering towards a sellout after considering other life support options, but may not attract many bidders currently. “Nicholas Piramal, besides Jubilant, is pursuing the deal seriously,” added sources.

ET first reported Jubilant’s impending bid last week. Sources said the valuation of Cambrex is expected to be depressed at over $500m. The US company, with a market capitalisation of $535m, incurred a $140m loss in the last quarter of ’05, as earnings of the Biopharma unit involved in contract manufacturing lost steam.

However, Cambrex, which garners the bulk of its revenues from products and services aiding drug discovery and therapeutical testing, is betting on its core businesses performing well on account of the ageing demographics in the Western markets. Incidentally, most Indian pharma companies have been raising (or have already raised) funds for significant global acquisitions.

NPIL announced a $350m acquisition of Pfizer’s UK plant last week, and said the inorganic growth strategy could continue in the near future. Jubilant said it is working on multiple acquisition targets in the US and in Europe.

The inorganic growth model would help the domestic companies cut short the learning curve, ramp up customer relationships and better market access, as most of them are strategising on scaling up the growth potential.