The Indian contract research and manufacturing services (CRAMS) made set out its plan at CPhI in Madrid last week, expanding on its previous announcement that it is in talks with several potential acquisition targets in the US and Europe.
COO Vijay Shah told attendees at Piramal's press conference the firm wants to use some of the $3.7bn it was paid by Abbott for its generics business in 2010 to buy additional manufacturing capacity, specifically in areas like sterile injectables production.
But while Piramal has been seeking acquisitions for nearly three years Shah rejected the idea the firm is struggling to make a deal, stating that: "We are not desperate buyers."
"We don't want to overpay" Shah continued, explaining that "most of the [manufacturing] assets currently available are being sold off by private equity organisations who want value."
He went on to say that all the sites Piramal is looking at are in the West - except one which is India - adding that the CRAMS firm expects "CMO business growth in the West [as] people are no longer going towards low-cost.
"Thinking in Big Pharma is changing" Shah said, adding that "companies want to work with fewer suppliers with financial strength and sites with a track record. Why take the headache of approving new vendors?"
Shah also spoke about Piramal's existing manufacturing capacity, specifically the facility in Morpeth, Northumberland in the UK which it acquired from Pfizer in 2006.
Shah explained that the supply contract Piramal signed with Pfizer at the time will continue, adding that the US drug major is 'delighted' with the arrangement. He added that: "Next year [the relationship with Pfizer] may expand to other areas" but did not go into specifics.
Piramal's efforts to add new capabilities fits with the firm's contention that consolidation is an inevitability for the contract development and manufacturing sector.
Shah said that: "Private equity has chased assets, but now is the time for consolidation" adding that the top 10 active pharmaceutical ingredient (API) and formulation contractors account for less than 30 per cent of the global market.