Eris Lifesciences has entered into a definitive agreement to acquire the India-branded formulation business of Biocon Biologics for ₹1,242 crore, a move that strengthens its footprint in the domestic injectables segment, and catapults it into the top bracket of the insulin segment.
The transaction includes all trademarks, net working capital and about 430 employees, Eris told the stock exchange. The acquisition also marks Eris’ entry into oncology and critical care.
The incoming Biocon Biologics’ domestic formulations business had revenues of ₹360 crore, said Krishnakumar Vaidyanathan, Eris LifeSciences’ Executive Director and Chief Operating Officer, adding that the valuations were reasonable and the company would now undertake an integration process of its recently-acquired businesses. The acquisition provides immediate synergies with the recently-acquired Swiss Parenterals business, he told businessline. Last November, Eris had acquired Biocon Biologic’s Nephrology and Dermatology businesses, as well.
Coming into Eris’ fold are two major insulin brands – Basalog and Insugen, and its diabetes business, post acquistition, will reach ₹1,000 crore in revenue, making it the fifth-largest diabetes portfolio in India (with oral drugs and insulin), company topbrass said, in post-deal interactions.
In its statement, Biocon Biologics said the collaboration was in-line with its strategy “to unlock value from its legacy business of branded formulations built over the past two decades”.
Supply agreement
The two companies also inked a 10-year supply agreement, and it included a tech-transfer component, Krishnakumar said. The Biocon product range will continue to be manufactured and supplied to Eris for commercialisation in India.
The entry into oncology brings into Eris’ portfolio, three mainstream monoclonal antibodies including Nimotuzumab (head and neck cancer), Trastuzumab (breast cancer), Bevacizumab (colorectal cancer, among others).
The Biocon product range can be quickly scaled up by leveraging the product portfolio of Swiss, which consists of 240-plus unique molecules, the company said.
Amit Bakshi, Chairman and Managing Director of Eris Lifesciences, said the latest transaction along with the acquisition of Swiss Parenterals (announced last month) , would “turbocharge” their entry into the ₹30,000-plus crore India-branded injectables market and pave the way for their next ₹1,000-crore vertical in the next four-odd years. “Over the last two years, we have added a number of strategic growth engines to our portfolio and now we have all the building blocks in place to be able to achieve our target of ₹5,000-crore revenue over the next three-four years,” he added.
The deal will be funded through debt financing, the company management said. The company currently has a debt of ₹3,000 crore, Krishnakumar added. The transaction is expected to achieve financial closure before April 15.