Eris to buy derma, nephro units of Biocon Biologics for Rs 366 cr

Eris Lifesciences, a formulations company focused on the Indian market, has signed an agreement to acquire the nephrology and dermatology business units from Biocon Biologics for Rs 366 crore.

The agreement is for more than 20 brands that earned Rs 90 crore as revenue in FY23 and have a run rate of around Rs 100 crore. Eris, which is based in Ahmedabad, said in a statement on Wednesday that the deal is inclusive of working capital. The acquisition marks Eris’ entry into nephrology. Biocon Biologics is divesting its non-core assets to focus on its key therapy areas, diabetes, oncology and immunology.

Biocon Biologics said the transaction value of Rs 366 crore represents an accretive multiple of 4x on revenues and 22x on Ebitda. 

“The key leadership and entire field force of this business, consisting of over 120 personnel, are expected to move to Eris post deal,” it said. Eris has entered new therapy areas through acquisitions earlier.

Eris entered the therapy segment of neuropsychiatry in 2017 by acquiring Strides Shasun’s domestic business. It entered dermatology in 2022 by acquiring Oaknet Healthcare, followed by brand portfolios from Glenmark and Dr Reddy’s Laboratories (DRL) in early 2023.

This is a strategic addition to Eris’ flagship cardio-metabolic business and post deal Eris will offer end-to-end care to patients starting with Diabetes and Hypertension and all through to Chronic Kidney Disease (CKD), the company said.

The new deal catapults Eris into the second largest player in psoriasis (dermatology) with an 11 percent market share.

“Dermatology is all set to become Eris’ third largest therapy soon, after diabetes and cardiovascular. With dominant market positions in three of the Top 5 chronic therapies, Eris is well-positioned to deliver market leading growth in the years to come,” the company said.

“We have successfully demonstrated our ability to turn around and create value in acquired businesses. The acquisition of Biocon Biologics’ nephrology- and dermatology-branded formulations businesses in India are in line with our strategic goals as well as our capital allocation framework,” said Amit Bakshi, chairman and managing director of Eris Lifesciences.

“We are very happy to welcome domain experts in nephrology and dermatology from Biocon. I look forward to all of us working together to build a large franchise that will deliver immense value to patients. I am confident that this acquisition will deliver value to shareholders in line with the deals we have done in FY23 and prior,” he said.

Shreehas Tambe, chief executive officer and Managing Director, Biocon Biologics, said: “This divestiture of non-core assets allows Biocon Biologics to unlock value within our branded formulations portfolio in India and sharpen focus on our core therapy areas like Diabetes, Oncology and Immunology.”

Biocon Biologics is committed to the successful transition of employees of these business units, product brands, and customers to ensure continuity, he said.