Cipla is increasing its stake in its consumer health business to 100 per cent and is looking for tie ups with e-pharmacies for sales growth in the domestic market. On Wednesday the company announced it is acquiring a 26 per cent stake held by private equity firm Eight Roads Investments Mauritius Limited for Rs 350 crore to assume full control of Cipla Health.
The drug maker had set up a separate company with private equity investment in FY2016 to tap the fast growing over the counter medicine portfolio. The business includes well known brands like nicotine replacement therapy gum Nicotex and cough lozenges Cofsils and had a turnover of Rs 147 crore as on March 2019. Cipla today said it has signed a definitive agreement with Eight Roads Investments to give it an exit and take control. The transaction will be completed in a month, it said.
"We are committed to growing the consumer health business and are looking at launching multiple products across therapies," Cipla's global chief financial officer Kedar Upadhye said.
He did not share specifics, but said some of the products would be in the pain management category.
"The (online) channel is of relevance to us and we are looking at ways to engage," Upadhye said. He added that the company had made no decision on whether its collaboration would be limited to a commercial arrangement, or would include equity investment.
A media report last week said that Cipla was in talks to acquire a stake in e-pharmacy Medlife and looking to invest Rs 150-170 crore in the business. Cipla had declined comment on the report.
“We witnessed a muted first quarter in FY’20 owing to a combination of external volatility and some conscious business decisions taken with the long-term sustainability in mind. Our secondary growth in our flagship therapies in India and in the South Africa private market remained impressive, and our base business in the US saw y-o-y growth with increased revenue from recent high-value launches. Our business fundamentals remain strong, and our overall base business profitability was maintained at healthy levels despite the volatility," Cipla's chief executive officer said in a statement.
The company reported Rs 478 crore net profit, a rise of 6 per cent year-on-year in Q1FY20.