Corona Remedies, the Ahmedabad-headquartered mid-sized pharmaceutical firm, has acquired two diabetes and hyperthyroidism brands, Obimet and Thyrocab, comprising 14 product line extensions, from multinational drug major Abbott India for an undisclosed sum.
A domestic market-focused company, Corona is trying to plug gaps in the therapy segments. It is betting on the cardio-metabolic disorders segment for future growth. This segment, with a market size of Rs 108 billion, is clocking 13 per cent annual growth. It also aims to improve the share of chronic therapies in its portfolio. Earlier, Corona had acquired four brands from GlaxoSmithKline (Dilo-BM, Dilo-DX, Stelbid and Vitneurin), about a year before, and has managed to grow the brands by around 50 per cent in one year. Tejas Kothari, its head of strategy, said, “We can grow these brands faster as we can take these to tier-II and tier-III cities and expand the reach. When we acquired the GSK brands, they had a turnover of around Rs 100 million, which has touched Rs 150 million in one year, or grown by 50 per cent.”
The cardio-metabolic segment, he said, accounts for 10 per cent of its revenues and Corona plans to take that to 25 per cent in the next three years. The company draws 65 per cent of revenues from acute therapies and the rest from the chronic and semi-chronic segments. The plan is to draw 50 per cent of revenues from chronic therapies, a more stable source, in the next three years.
Sources indicated the acquisition value was around three times the current sales value of Abbott's brands. These are popular prescription drugs and Corona expects the brands to clock sales of around Rs 250 million in the first year of integration.
Incorporated in December 2004, Corona has grown at a compounded annual rate of about 40 per cent over the years and ranks 47th in the Indian pharmaceuticals market, according to a study. Its revenue was Rs 4.15 billion in 2017-18, with an operating profit margin of around 10 per cent. It has funded its recent acquisitions from internal accrual.
Corona has a certified manufacturing facility in Solan, Himachal Pradesh, which has a manufacturing capacity of one billion tablets, 60 million capsules and 10 million liquids per annum. The company has since acquired land at Bavla near Ahmedabad to set up a second facility in the country (with a capacity of two billion tablets, 600 million capsules and 60 million liquids per annum), which would focus primarily on the international markets. Exports are negligible for Corona at the moment, constituting only three-four per cent of its turnover.