Two Indian generic drug firms are believed to have expressed their interest, while some eight European firms have indicated that they are interested in partly or wholly acquiring the Tipperary-based company. It is understood that no formal offer has yet been made for Pinewood and any deal tabled would probably take a number of months to complete.

Indian healthcare firm Zydus Cadila is being touted as one of the potential investors. With a market capitalisation of 620m, it has a number of European operations controlled by a holding company in Ireland.

Earlier this month Zydus Cadila director Ganesh Nayek said there are many untapped generic markets in Europe, including Ireland.

Zydus Cadila and other Indian drugmakers are turning to overseas markets, especially in Europe and the US, as medicines worth billions of euro lose patent protection.

Pinewood manufactures creams, ointments and powders that are distributed internationally. It manufactures and markets a range of generic drugs, such as cardiovascular, hormonal and rheumatology treatments. It also provides subcontracting facilities, with clients including Novartis, Smithkline Beecham and Roche.

The latest accounts show that Pinewood generated turnover of almost 37m in the 12 months to June 2004 and made an operating profit of over 3.8m. That compared to revenue of 34m and an operating profit of over 3.3m the previous year.

In 2004 Pinewood unveiled a 19m expansion to its facilities. It employs roughly 350 people, and has a sales and distribution base in Dublin, where it supplies many of the hospitals. It is believed that a strong performance in the past two years has seen turnover rise to 50m.

Pinewood Healthcare was established in 1977 and was later acquired by its current managing director, Michael Costello, who remains its majority shareholder. Enterprise Ireland has invested a total of 3.4m in the company since its incorporation. Significant tranches of the grants made available have been invested in R&D.