Pharmaceutical Marketing Company looking for Equity Investment

Opportunity Snapshot

  • Country: India India
  • Industry: Medical, Health Care, Pharmaceutical
  • Stage: Initial growth (first revenues)
  • Years in operations: 1, Employees: 13
  • Investment size: $200,000 / min. $100,000
  • Type of investment: Debt, Equity

Investment Opportunity

We are looking for an equity investor who can invest around INR 60 lacs to INR 1 crore for which we can give the investor up to 40% equity stakes in the company.

We are a pharmaceutical marketing company based in Mumbai. We have closed our first year operations and have been able to establish a foot hold in our geographical areas of operations. We are now ready to take the next jump with 2 differential products we intend to launch and also implement our dual coverage business model. We are looking for equity investors with a long term vision.

We are operating in the southern part of India. We market products for management of complications of Kidney failure. Ours is a prescription based marketing model and sales are generated through doctor prescriptions for our brands. Kidney failure treatment in this country has a long way to go as there are still a lot number of patients untreated and diagnosed. We have a dual business objective of servicing the existing patient segment and at the same time improving diagnosis rates and providing treatment options for early stages of kidney failure to prevent progression.

We are now into the second year of operations and have been able to establish image as a nephrology company and to garner a sale of a crore in the 1st year in doing so. We intend to have all India presence by the 4th year of operation and achieve a break even by the 3rd year. The business will start delivering profits from the 4th year of operation and we expect the profits to be around 18% from the 5th year.

We currently require around 60 lacs to 1 crore investments and are ready to offer up to 40% equity in the company. The investor will have the option of exiting the business after a lock-in period of 3 years from the date of investment. He can sell off the stakes to another party provided the first offer is made to the current directors. We can work also on an interest and equity model if required.

Competitive Advantage

There are around 35 core Nephrology companies. Our approach to early stage CKD management is the core differential and would offer the advantage of a larger customer base as compared to other companies operating in the business. Also in terms of products, though till now we didn't have an advantage, we are ready with 2 product ideas which would give a competitive edge as compared to the other players.

Rationale for the deal

With regards to the market, the kidney disorder management market has a very healthy outlook, with only 30% of the patients currently being treated and with nearly 7 million people developing kidney disorder every year. Also diabetes, one of the primary causes of kidney failure is abundant in the market.

Though in the first year of operations we lost money because of the too many products, entry level discounts and good shortage. This year we are sure that with new products and investments we will be able break even by next year and start generating profits by the 4th year. In addition, the 2 executive directors have a rich experience in the field of pharmaceutical marketing and sales, with majority of the experience in the field of Nephrology. Finally, the market opportunity can be gauged by the fact that a company which entered this segment in 2005 is now a 50 crore plus company, with operating profits of 20%.

Use of financing

We are currently looking for an investment of 60 lacs, which would be utilised as follows:
• INR 25 lacs for working capital needs
• INR 25 lacs for clearing off unsecured loan
• INR 10 lacs for field force expansion

Opportunity for the investor

We are looking for an equity investor who can invest around INR 60 lacs to INR 1 crore for which we can give the investor up to 40% equity stakes in the company. Out of the investments required INR 40 lacs are needed immediately and the rest of INR 20 lacs can be provided later on, on-demand. We are open to both a silent and an active investor.

We can also have an arrangement of debt and equity, if the investor desires so.

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