Ahmedabad-based drug maker Cadila Healthcare Ltd (CHL), also known as Zydus Cadila, has announced the acquisition of the remaining 15 per cent stake in its subsidiary Zydus Technologies Ltd (ZTL) for roughly Rs 1.62 crore.
CHL already held 85 per cent in ZTL, which manufactures and markets novel drug delivery system (NDDS) products in the areas of pain relief, hormones and cardiovascular therapy. CHL said in its BSE filing that the acquisition, which has provided an exit route to strategic and minority partner of ZTL, Shared Govil, was valued at $225,000 (roughly Rs 1.62 crore) for 15 per cent equity share capital, representing 7.5 million fully paid-up equity shares of Rs 10 each.
With a manufacturing plant in Ahmedabad, ZTL sells its products to the US. Cadila Healthcare also acquired 15 per cent common stock of another subsidiary, Zydus Noveltech Inc, USA (ZNI) for $25,000 (approximately Rs 18 lakh) in which it already held 35 per cent common stock.
ZNI too is engaged in the business of NDDS products mainly for the release of pain, hormones and cardiovascular therapeutic areas. While ZNI handles the regulatory aspects of products, it has a wholly-owned subsidiary, Hercon Pharmaceuticals LLC in the US, which manufactures and sells transdermal products.
The acquisition of ZTL comes at a time when its net worth as on September 30, 2019 is negative at Rs 40.72 crore and turnover for the period of six months ended on September 30, 2019 is Rs 9.93 crore.
Releasing its financial results for the second quarter ended September 30, Cadila Healthcare registered a 77 per cent fall in its consolidated profit before tax (PBT) at Rs 122.4 crore, from Rs 535 crore in the said quarter last year. This was after an exceptional item of an impairment charge of Rs 268 crore towards Levorphanol intangibles due to the entry of a new competitor. The company's consolidated total income in Q2 of FY20 was Rs 3,393 crore, up 13 per cent over Rs 2,991 crore in the same period last year as per its BSE filings.
Growth in its business came on the back of a 24 per cent year-on-year (YoY) jump in Cadila Healthcare's India business. The company’s India business, which consists of human formulations, consumer wellness and animal health business, posted sales of Rs 1,430 crore in Q2FY20. The company's US business, on the other hand, grew by 10 per cent YoY to post sales of Rs 450 crore. In the emerging markets of Asia, Africa and Latin America, CHL's business grew by eight per cent.
In the second quarter of the current fiscal, the firm launched seven new products in the US, filed eight additional abbreviated new drug applications (ANDAs) with the USFDA and received six ANDA approvals during the quarter.
On the research front, CHL completed the second phase of EVIDENCES IV, a set of clinical trials of Saroglitazar Magnesium in patients with non-alcoholic fatty liver disease (NAFLD) and non-alcoholic steatohepatitis (NASH). Now, the company has also initiated patient enrolment for EVIDENCES VII Phase II clinical trials for evaluating the effect of Saroglitazar Magnesium in the treatment of NAFLD in women with polycystic ovary syndrome (PCOS) during the quarter. The patients are being recruited across multiple clinical sites in the US and Mexico, it stated.
On the vaccine research front, CHL received marketing authorization in India from the Drug Controller General of India (DCGI) for measles and rubella vaccine during the quarter, apart from authorization for rabies vaccine TwinrabTM (RabiMabs). The novel biologic which is a first-of-its-kind next-generation therapy, is indicated in combination with rabies vaccine for rabies post-exposure prophylaxis. The US drug regulator has granted an orphan drug status to this candidate.
Meanwhile, in a setback, the company's Moraiya plant which covers significant US sales was issued a warning letter recently by USFDA which CHL insisted does not affect its current operations.