French pharmaceutical company,
) Animal Health division, Merial, recently announced that it will
acquire a privately-held India-based company, Dosch
Pharmaceuticals Private Limited. The deal is expected to close in
the first half of 2013. The financial details of the deal were
Dosch Pharmaceuticals' animal health business has more than 86
animal health therapeutics and nutritional feed supplements and
We expect this deal to help Sanofi tap the Indian animal
health market better. Sanofi estimates that the Indian animal
health market will generate 2012 sales of €350 million,
exhibiting double-digit growth year over year.
As a reminder, Merial was founded in 1997. It was a 50/50
joint venture between
Merck & Co.
) and Sanofi. Sanofi acquired Merck's 50% share in September 2009
for $4 billion (approximately €2.9 billion). Currently, it is a
wholly owned division of Sanofi.
We note that Sanofi's biggest challenge is the generic threat
that is being faced by several of its products. The company lost
approximately €2.2 billion in sales in 2011 due to
Sanofi is looking to combat the generic threat through
inorganic growth. Moreover, Sanofi is introducing new products to
counter the loss of revenues due to genericization of key drugs.
We believe that the proposed acquisition of Dosch Pharmaceuticals
is a step in that direction.
We currently have a Neutral recommendation on Sanofi. The
stock carries a Zacks #3 Rank (Hold) in the short run.
Large-cap pharma stocks currently holding a Zacks #2 Rank
(Buy) include companies like
MERCK & CO INC (MRK): Free Stock Analysis
NOVO-NORDISK AS (NVO): Free Stock Analysis
SANOFI-AVENTIS (SNY): Free Stock Analysis
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