Prescriptions Consultants (Madras) Pvt. Ltd., a Chennai based pharmaceutical marketing and strategic business consultancy house with brand building and product management as its focus areas, has diverted its focus into the niche area of Mergers and Acquisitions (M&A), eyeing the trends and possibilities of the sector.

The company, which offers product portfolio expansion including recruitment and developmental training, has changed its focus, expecting a considerable number of mergers and acquisitions in Small and Medium Enterprises (SME) in the near future. The company eyes mainly on M&A in SME, other than the big acquisitions of foreign companies by Indian pharma companies, as the current trends shows the inevitable closure of many of the players.

"The current trends in pharma industry suggest that a number of mergers and acquisitions from the SME will take place within a few years. Our assumption is that a minimum number of around 15 M&A will occur in the sector within the next four years. We are trying to spearhead these developments, as the decision for merger will be useful for both the parties either it is the company which is being undertaken or the company which is undertaking the small one," K Sadagopan, Founder-Director, Prescriptions Consultants told Pharmabiz.

He said that the arrival of MNCs with new molecules, the changes in pharma industry in the post patent era, demand for better facilities and the government policies would form the cutting edge of the situation. The company gathers that the pharma players with a turnover of Rs.15 to 20 crore, with "me too" products and lacking a vision, will be the major sector to be eaten up in the M&A trend.

The economy of similar products also plays a major role in the scenario, as the scale of production on similar products from small, medium and large-scale players shows its result in the economy of sales. The company's speculation is that the comparatively big players will come up with merger plans eyeing the small companies with better standards of production and research. The action will be helpful for the small player to compensate its loss in closure and the company which undertakes the smaller one will achieve benefit through acquisition, explained Sadagopan.

Further, he commented that the company forecasts acquisition of 10 to 12 SME players in the financial year 2006-07. The SMEs, which are not able to fine-tune according to the changed situation, can take the M&A option as an advantage. He also said that the company's first advice would be to better the conditions of the players and the merger would be kept as the last option from the consultant's point of view.

The 19 year old Prescriptions Consultants sets its main activity on assisting pharma companies to acquire pharmaceutical brands so as to facilitate consolidation in key therapeutic segments, also handles two pharma clients from Australia and one from Spain.