The Indian pharmaceutical companies managed to restrict the volatile movements and faced relatively lower shocks as compared to other sectors like banking, oil & refineries, automobile, information technology, FMCG, metal, etc. With better financial performance, mergers & acquisitions, investment in R&D and higher number of approvals, the Indian pharma segment managed its resources well and moving ahead smoothly as compared to other segments of the economy.
Share price movement in pharma segment was under tremendous pressure due to rupee appreciation against US Dollar in the first few months of 2008, high cost of acquisitions in few cases, slower returns from R&D investments and stiff generic competition in the regulated markets.
The BSE Healthcare index of 25 major pharmaceutical companies declined by 7.3 per cent on July 4, 2008 from its close of last day of 2007. However, the benchmark BSE Sensex of 30 major companies from various sectors moved down by 33.7 per cent during the same period. The BSEHC was closed at 4123.29 points on July 4, 2008 as compared 4418.65 points as at the close of 2007, a fall of 7.3 per cent. During the same period, the BSE Sensex of 30 companies declined to 13454 points from 20287 points as at the end of 2007.
In line with the BSE Sensex, the BSEHC index also experienced several volatile movements during the first six months of 2008. The health care index touched to its peak level at 4602.15 on June 18, 2008 and lowest at 3256.94 on January 22, 2008.
The pharm analyst pointed out that the pharma scrips have not received major blow like other sectors and the sector will enjoy FIIs and investors confidence with better returns. Though the MNCs are adopting wait and watch policy regarding government policy, these companies will try to tap Indian market in future.
The share prices of leading and mid-cap pharma companies moved up and down during the quarter with the change in buying and selling sentiment. The decision of promoters' of Ranbaxy to sell off their stake to Japanese firm - Daiichi Sankyo and Sun Pharmaceutical's fight for controlling stake in Taro Pharmaceutical impacted the overall pharma scrip movements.
Recently Glenmark Pharmaceuticals Ltd. (India) has signed agreements with Actavis, the international generic pharmaceutical company from Iceland, and Biovena (an affiliate of Actavis in Poland) to acquire 7 pharmaceutical brands in Poland. Similarly Piramal Healthcare Ltd (PHL) has acquired polygeline based blood plasma products brand 'Haemaccel' of PlasmaSelect AG, Germany for a total consideration of Euro 7.7 million (around Rs 52.6 crore). Zydus Cadila is acquiring majority stake of 70 per cent in Simayla Pharmaceuticals of South Africa, through its wholly owned subsidiary. Zydus Healthcare SA PTY Ltd. These mergers and acquisitions will spread the presence of Indian companies in the international market in coming years