Drugmaker Lupin is set to carve out its trade generics business in India and transfer it to wholly-owned subsidiary Lupin Life Sciences Limited, for about ₹100-120 crore.

Lupin said the sale was intended to achieve agility, greater focus and growth of its trade generics business by investing in new launches and penetrating underserved markets. “Trade generics are poised for higher growth, given the need for accessibility, availability and affordability of medicines. However, there is specific focus required to achieve this,” it added.

The two companies are likely to ink the business transfer agreement in the first quarter of FY25, Lupin said. The proposed transfer  to Lupin Life Sciences included all related assets and liabilities, including but not limited to movable assets, products, employees, contracts (including lease deeds), intellectual property, licences, permits, consents, approvals, transferable tax credits, trade receivables, inventory, trade payables and insurance policies, the company said.

The FY23 revenues of the undertaking stood at about ₹277 crore, representing 2.5 per cent of the company’s turnover on a standalone basis Net worth of the undertaking was about ₹72 crore, it added.

The slump sale of the undertaking on a going concern basis would be subject to approvals, with the sale expected by June 30, 2024, or as agreed upon by the two companies, it added. Lupin Life Sciences was incorporated on July 17, 2023, and did not belong to the promoter or promoter group companies, it clarified.

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Cipla’s transfer

Late last year, drugmaker Cipla announced it would transfer its generics business as a going concern on a slump sale basis to Cipla Pharma and Life Sciences Limited (CPLS), its wholly owned subsidiary, for ₹350 crore.

Cipla’s rationale was that the generics market was expected to grow rapidly and it was one of the largest players. The move aimed “to provide agility, singular focus and faster decision-making,” it had said.

Further, it had pointed out, “The transaction will help in capitalising on this high-growth potential business by increasing investments in new launches, deepening penetration in Tier 2-6 towns/cities and improving patient access through high-quality generic medicines.”

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