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Indegene to acquire Canada-based company for $4 million

19 Nov 2012

Bangalore-based Indegene Lifesystems, a leading provider of R&D and marketing solutions to pharma MNCs, is acquiring the multi-channel marketing business of Canada-based Aptilon, engaged in e-marketing healthcare solutions.

The acquisition marks the growing shift to digital advertising and multi-media marketing by pharma companies, which is around $10 billion space globally.

Indegene will acquire the multi-media marketing assets including the proprietary technology of the Canadian company, Aptilon, all valued around $4 million. The acquisition will be done through Indegene's US subsidiary, and a new entity, Indegene Aptilon, Inc will be floated, Indegene Chairman and CEO, Manish Gupta told TOI. The company was assisted by a boutique Canadian investment banking firm for the transaction. The deal which closed on November 6 is expected to be announced soon.

With increasing cost pressures faced by pharma biggies, coupled with regulatory guidelines preventing the traditional 'medical representative-based' marketing, multi-media marketing is projecting to grow substantially, says Gupta.

Since the effectiveness of the rep-based approach'' is increasingly questionable, pharmaceutical companies are focusing more of their investments on multi-channel marketing programmes which promise a more effective and cost-optimized engagement of the physician, he added.

Through this acquisition, Indegene is looking to strengthen and consolidate its position as a preferred partner in multi-media marketing and virtual sales marketplace in North America and Europe. Upon completion of the deal, Aptilon's multi-channel, e-detailing, and physician marketing services businesses will be rolled under Indegene Aptilon Inc, a fully-owned subsidiary of Indegene Lifesystems. The transaction will be completed in the next few weeks, subject to regulatory approvals.

Sales representatives have been the key component of sales and marketing strategies employed by pharmaceutical companies and have traditionally formed the primary link between the company and the physician. But this may soon be changing, Gupta said. Rapidly growing adoption of new/virtual channels of communication by the healthcare professionals (HCPs), and shifting of influence from HCPs to new stakeholders (patients, payors, etc) on choice of treatment is driving the shift from traditional to virtual marketing.

According to a study by McKinsey, approximately 65% of the influence to determine the choice of drugs prescribed is now exerted by new stakeholders - payers (35%), patients (15%), pharmacies (5%) and government (10%).

Despite the weaning influence of physicians, 84% of the commercial spend by large drug companies remains focused on them.

Digital advertising spend alone by pharmaceutical companies is expected to double to $3 billion by 2016, while total expenditure on detailing (marketing) in US is around $10 billion now.

"For us the opportunity is both spends that will get rolled under marketing", Gupta says.

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