U.S. buyout firm KKR & Co LP has agreed to invest about $200 million in Indian drugmaker Gland Pharma Ltd, marking the largest private equity investment in the local pharmaceutical sector amid growing demand for generic drugs in overseas markets.
Under the deal, KKR will acquire a minority holding in Gland Pharma, including the stake held by private equity fund Evolvence India Life Science Fund, KKR said in a statement on Thursday. The size of the stake was not disclosed.
KKR'S latest investment in India underscores the positive outlook for generic drugmakers, despite some concerns about manufacturing quality after the recent crackdown by overseas regulators including the U.S. Food and Drug Administration.
Private equity firm Actis last month invested $48 million in Symbiotec Pharmalab Ltd, a producer of steroid-hormone active pharmaceutical ingredients in India.
Indian drugmakers are among the world's biggest producers of cheap generic medicines, as developed nations battle rising healthcare costs and big-selling drugs going off-patent in the lucrative U.S. market.
The rise in demand for generic drugs has led to closer regulatory scrutiny and a rash of sanctions imposed on top drugmakers including Ranbaxy Laboratories Ltd (RANB.NS) (link no longer available) and Wockhardt Ltd (WCKH.NS) (link no longer available).
Gland Pharma develops and manufactures generic injectables primarily for selling in the U.S. market and also for India and some other markets.
KKR's investment in Gland, which is subject to regulatory approvals, will represent the New York-based firm's second private equity transaction in India this year. KKR has invested about $1 billion in companies in Asia over the last two months.
KKR's investment in Gland represents its fourth announced investment from its $6 billion Asia fund, which it raised in July to deploy more capital in emerging markets where slowing economic growth has cut overall company valuations.
Private equity investments in India fell 67 percent in the July-September quarter from a year earlier to about $1.3 billion, according to data from sector tracker Venture Intelligence.
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