The Bangalore-based Rs 20-crore clinical research organization (CRO), Lotus Labs, is on the verge of being taken over by Actavis, a US$900- million company listed in the Icelandic Stock Exchange and deal is expected to be signed within few days.
According to reliable sources, Lotus has been acquired for Euro 20 million. The buyout is the largest and first ever such deal in the business of CRO. Lotus Labs will be the forerunners to decide a valuation on the CRO business. The management structure will not be changed. Ernst & Young are the advisors for the buyout, it is learnt.
When contacted by Pharmabiz, Sudhir Pai, managing director, Lotus Labs, said, "We signed an MoU with Actavis which is a strategic collaboration for conducting bio-equivalence studies. Since Actavis has already built a formidable clientele in regulated markets, it will help us to increase the customer base. There are several companies which are approaching us for alliances going by our expertise in having conducted over 500 bio equivalence studies and clinical trials in the areas of Phase I and phase III for customers across the world." However, he refused to divulge more details on the development.
The president of the Republic of Iceland, Olafur Ragnar Grimsson, who was accompanied on his visit to India by Robert Wessman, CEO of Actavis, who has confirmed the acquisition.
Actavis is a leading player in product development and contract manufacture with two offices in the Europe and US. It develops molecules and sells it to various other companies. "Under the alliance with Lotus, Actavis will develop molecules, do the bio-equivalence studies with us, compile the report and then sell the molecules. Lotus will capitalize the Actavis association to strengthen its presence in Europe. This strategic collaboration is expected to give a fillip to our foray in to global arena in a faster pace," he informed.
The four-year-old Lotus Labs has already opened a 50-bedded facility at Chennai which will be doubled in April 2005. There are investments slated for a new corporate office in Bangalore in view of the laboratory expansion. Once the Chennai operations are stabilized, Lotus intends to move to Mumbai, Baroda and Mangalore by September 2005. The company is also aggressively scouting for tie-ups for Phase II trials, which would become a potential business avenue. Having achieved a turnover of Rs 20 crore, a growth rate of 120 per cent in the last nine months, and with the overseas business maturing more than 500 per cent, the current year earnings could be seen growing at the same pace if not doubled, stated Pai.