Dr Reddy's Laboratories has announced that it has entered into an agreement with pharma major Wockhardt to acquire select divisions of its branded generics business in India and a few other international territories of Nepal, Sri Lanka, Bhutan and Maldives for a consideration of Rs 1,850 crore.
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The business comprises of a portfolio of 62 brands in multiple therapy areas such as respiratory, neurology, VMS, dermatology, gastroenterology, pain and vaccines, which would transfer to Dr Reddy's along with related sales and marketing teams; and the manufacturing plant located in Baddi, Himachal Pradesh with all plant employees, the two companies said in separate regulatory filings.
The business undertaking is being transferred on a slump sale basis, the filing said.
GV Prasad, the Co-Chairman and Managing Director of Dr Reddy's said, "India is an important market for us and this acquisition will help in considerably scaling-up our domestic business. The acquired portfolio shall enhance Dr Reddy's presence in the high growth therapy areas with market-leading brands such as Practin, Zedex, Bro-zedex, Tryptomer and Biovac."
He said that the portfolio holds a lot of potential and will get an impetus under Dr Reddy's. The transaction is expected to be closed in the first quarter of the financial year 2020-21.
Wockhardt will also transfer to Dr Reddy's the sales and marketing teams related to these areas, and a manufacturing plant located at Baddi in Himachal Pradesh with all employees.
Wockhardt said revenue from business undertaking proposed to be transferred was Rs 594 crore during FY2018-19, and Rs 377 crore during the nine-month period of the ongoing fiscal ended 31 December 2019, reported PTI.
Wockhardt Group Founder Chairman Habil Khorakiwala said the intended sale of business portfolio is in line with the company''s strategic plan to shift from acute therapeutic areas to more chronic business like anti-diabetes, central nervous system (CNS) and also to its niche antibiotic portfolio of new chemical entities (NCEs).
"The divestment will also ensure adequate liquidity to bring in robust growth in the chronic domestic branded business, international operations, investments in Biosimilars for the US market apart from the company''s global clinical trials of Break-through Anti-lnfectives (NCEs approved under coveted QIDP1 program of United States Food & Drug Administration) and R&D activities," he added.
After the sale of the select business, Wockhardt said it would continue to own all international operations in UK, USA, Ireland and other locations through its step down subsidiaries.
The formulation plants located at Waluj, Shendra and Chikalthana in Aurangabad, Bhimpore and Kadaiya in Daman; bulk drugs plant at Ankleshwar, India and manufacturing facilities at all existing international locations would also continue to be owned by the company.
Wockhardt said its research and development centers located at Chikalthana, Aurangabad, India and existing facilities in the international locations would also continue to be under its fold along with a significant part of domestic branded business constituting chronic and speciality portfolios.
— With inputs from agencies
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Updated Date: Feb 12, 2020 14:49:02 IST