On July 25, Mankind Pharma announced its acquisition of Bharat Serums and Vaccines (BSV) from Advent International for approximately Rs 13,630 crore. In an exclusive interaction with BW Healthcare World, Rajeev Juneja, MD and Vice Chairman of Mankind Pharma, discussed the impact of this acquisition on the Indian pharmaceutical market.
Juneja believes that Mankind Pharma's acquisition of Bharat Serum and Vaccines Limited (BSV) is driven by several motives. He said that the primary aim is to expand into high-entry barrier and super-specialty segments, particularly in women's health and fertility, where BSV has a strong presence. The acquisition brings in a complex portfolio with limited competition, including several market-leading brands, and provides access to a robust R&D and speciality tech platform, especially in recombinant technology, niche biologics, and immunoglobulins.
“Mankind also seeks to add complementary products to its existing portfolio, including high-potential OTX brands. The deal is expected to be margin-accretive, improving EBITDA margins. By leveraging its extensive reach, Mankind aims to unlock synergies and target rapidly growing, highly underpenetrated markets, especially in fertility,” Juneja highlighted.
“The acquisition aligns with Mankind's vision to strengthen its position in chronic and lifestyle diseases, acquire complex manufacturing capabilities, and expand its presence in international markets, albeit still with a primary focus on the domestic market,” said Juneja.
Mankind's focus on R&D
According to Juneja the acquisition of BSV significantly enhances Mankind’s R&D capabilities, especially in niche areas. BSV has developed a robust specialty R&D tech platform with capabilities in recombinant biologics, novel delivery systems, and immunoglobulins.
“A prime example of their R&D prowess is anti-D, where BSV is the only company in the world to develop recombinant anti-Rh(D). This product prevents RhD immunisation in pregnant mothers. BSV's R&D has also led to several first-in-India launches, backed by proven capabilities in recombinant technology and complex delivery systems. They have a strong product pipeline, including biosimilars in human healthcare and innovative products in anti-infectives,” MD delineated.
“Moving forward, we'll continue to invest in and leverage these enhanced R&D capabilities to develop more innovative, high-entry barrier products across various therapeutic areas,” he said.
What new markets is mankind pharma targeting?
“With the acquisition of BSV, Mankind Pharma is targeting several new markets and segments. Firstly, we're significantly expanding our presence in the women's health and fertility market. BSV offers a comprehensive portfolio that covers the entire women's health spectrum from fertility to pregnancy and post-pregnancy care. We see immense potential in the fertility drug market, which is big and fast-growing both in India and globally,” Juneja informed.
“BSV's portfolio positions us well to capture this market. Secondly, we're strengthening our position in critical care and speciality segments. BSV brings complex and speciality portfolios in these areas, which complement our existing offerings. Thirdly, we're expanding our presence in the international markets. Lastly, we're entering new therapeutic areas where BSV has leadership positions, such as immunoglobulins and recombinant biologics,” Juneja added.
Can this deal help Mankind Pharma expand its business overseas?
“This deal could potentially help Mankind Pharma expand its business overseas, but the focus appears to be primarily on emerging markets rather than developed countries. BSV currently has a presence in 15 international markets, with two key home markets being the Philippines and Malaysia. The company plans to increase its focus on getting approval for its patented Anti-D molecule in these 15 markets over the next 4-5 years,” Juneja said.
He also highlighted that there are plans to expand into about 20 additional ROW (Rest of World) markets where filings are in process. While there is potential for growth in international markets, the company's primary focus appears to remain on the Indian market, with international business expected to contribute only about 13 per cent of the combined entity's revenues.
What are the current trends of the market post-acquisition?
“The combined entity will have a stronger presence in high-entry barrier, super-specialty segments, particularly in women's health and fertility. Mankind's portfolio expands to include 50 brands with sales above Rs. 50 crores (up from 40 pre-acquisition). The acquisition is expected to be EBITDA margin accretive, with pro forma EBITDA margins exceeding 25 per cent in FY24,” said VC.
Talking about the future aspirations, Juneja said, “Mankind anticipates leveraging its extensive reach and operational excellence to accelerate growth of BSV's portfolio. The company expects to realise revenue and cost synergies of Rs 50-100 crores over the next 12-24 months. Mankind's focus remains primarily on the domestic market, with international business contributing about 13 per cent of combined revenues post-acquisition.”
Expected return on investment (ROI) for this deal
Juneja sees this more as a strategic acquisition that gives access to a high entry barrier complex portfolio with a sophisticated R&D tech platform, complementary to the existing portfolio of Mankind. Mankind expects ₹50-100 Crore in synergy benefits over the next 12-24 months, which will enhance both top-line and profitability. On a fiscal 2026 basis, EBITDA is projected to be around 17-18x, which Juneja views as an attractive valuation given BSV's super speciality complex portfolio. This is an EBITDA accretive transaction as BSV’s EBITDA is at 28 per cent currently, with the potential to exceed 30 per cent in the near term.
MD expects to realise EPS accretion from the second full year onwards and forecasts that net debt to EBITDA will be no more than 2x by fiscal 2026. These factors indicate a strong potential for margin expansion and improved cash flow operations.
Is Mankind Pharma expecting a boost in the company's sales?
“Mankind Pharma is poised for a significant sales boost from the BSV acquisition. In FY2024, BSV reported revenue of ₹1,723 Crore, delivering a robust 20 per cent year-on-year growth. BSV's India business has outperformed the Indian Pharmaceutical Market (IPM) growth by 1.7x, achieving more than 9 per cent volume growth. Additionally, BSV's international business has grown at a 25 per cent CAGR over the last three years in constant currency terms,” Juneja said.
“The acquisition brings complementary portfolios, particularly in women's health, fertility, and critical care segments, which are anticipated to contribute significantly to sales growth,” he added.
As per him, BSV has several fast-growing brands, some of which are expanding at rates of 30-60 per cent, especially in the fertility segment. This strategic acquisition is expected to solidify Mankind Pharma's position as the number 1 pharmaceutical company in the gynaecology segment and complete its "pyramid" strategy by bolstering its presence in high-end, complex markets with substantial entry barriers.
Mankind Pharma to OTC category
Emphasising the importance of OTC and OTX (over-the-counter with prescription influence, Juneja said, “This approach aligns with our goal of building Mankind's overall brand equity and creating a strong presence in the consumer healthcare space.”
“We have a clear strategy focused on OTC and OTX (over-the-counter with prescription influence) products, which has been a key part of our growth and brand-building efforts. Our successful track record includes well-known brands like Manforce, Prega News, and Unwanted 72, which have significantly contributed to building Mankind's overall brand equity,” he added.
“Our recent acquisition of Bharat Serum and Vaccines (BSV) further improves our OTC portfolio. BSV brings popular OTX and OTC-flavored products like Lactare and Ossopan, which have tremendous growth potential. We're enthusiastic about nurturing these brands and maximising their market presence under the Mankind umbrella,” Juneja concurs.
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