INDIA – Indian pharma giant Dr. Reddy’s Laboratories has agreed to sell certain non-core brands of the company in the dermatology segments to Eris Lifesciences Limited in a deal worth Rs. 275 crores (US$33.2 million).
The company offers a wide portfolio of products and services through its three businesses: Pharmaceutical Services and Active Ingredients, Global Generics, and Proprietary Products.
“The company’s goal is to provide affordable and innovative medicines for healthier lives, and it achieves this goal as a manufacturer of cost-effective generics,” Dr. Reddy’s says on its site.
Following the non-core brand acquisitions, the drug major plans to focus on its core activities.
The nine brands included in the transaction are largely in cosmetology segments such as anti-acne, moisturisers, cleansers, anti-ageing, hair health, and melasma.
Dr. Reddy’s will pursue further growth in India in line with the company’s strategy to grow its brands organically combined with acquisitions that are a strategic fit and divestment of non-core brands.
On his part, M. V. Ramana, CEO, Branded Markets (India & Emerging Markets), Dr. Reddy’s Laboratories, said: “India is a focus market for us. We aspire to break into the top 5 in India.”
He further said that the all-cash deal is a further step towards consolidating their core business, adding that Dr. Reddy’s plans to deliver focused play in India in line with its purpose of ‘Good Health Can’t Wait’.
Under the agreement, Eris Lifesciences will be assigned the trademark of the selected dermatology brands by Dr. Reddy’s.
“The transaction will be financed through borrowings and will achieve financial closure in the next few days,” stated Eris.
According to the company statement, the entire operation is expected to be finalized by March 31st, 2023.
Eris is expected to rank third in its dermatology-covered market with a market share of seven percent upon completion of the acquisition.
This move follows Eris’s entry into the dermatology segment through the acquisition of Oaknet Healthcare for Rs 650 crore (US$78.6 million) in May 2022.
The company also strengthened the franchise with the acquisition of a portfolio of dermatology brands from Glenmark in January 2023 for Rs 340 crore (US$41.1 million) to deepen its presence in the anti-fungal and anti-psoriasis segments.
In total, Eris Lifesciences has invested Rs 1,265 crore (US$153 million) in acquisitions in the current fiscal to build its dermatology franchise.
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