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Wockhardt sells select divisions of branded generics biz to Dr Reddy's for Rs 1,850 cr

Press Trust of India  |  New Delhi 

Pharma major Wockhardt Ltd on Wednesday announced sale of select divisions of branded generics business in India and four other countries to Dr Reddy's Laboratories for Rs 1,850 crore.

Besides India, the four countries are Nepal, Sri Lanka, Bhutan and Maldives.

The business comprises of a portfolio of 62 brands in multiple therapy areas such as respiratory, neurology, dermatology, gastroenterology, pain and vaccines, among others which would be transferred to Dr Reddy's along with related sales and marketing teams, the two companies said in separate regulatory filings.

The acquisition would also include Wockhardt's manufacturing plant located in Baddi in Himachal Pradesh along with all plant employees. The business undertaking is being transferred on a slump-sale basis, the filing added.

Wockhardt said revenue from business undertaking proposed to be transferred was Rs 594 crore during FY2018-19, and Rs 377 crore during the nine-month period of the ongoing fiscal ended December 31, 2019.

Wockhardt Group Founder Chairman Habil Khorakiwala said the intended sale of business portfolio is in line with the company's strategic plan to shift from acute therapeutic areas to more chronic business like anti-diabetes, central nervous system (CNS) and also to its niche antibiotic portfolio of new chemical entities (NCEs).

"The divestment will also ensure adequate liquidity to bring in robust growth in the chronic domestic branded business, international operations, investments in Biosimilars for the US market apart from the company's global clinical trials of Break-through Anti-lnfectives (NCEs approved under coveted QIDP1 program of United States Food & Drug Administration) and R&D activities," he added.

Commenting on the acquisition, Dr Reddy's Co-Chairman and Managing Director G V Prasad said, "India is an important market for us and this acquisition will help in considerably scaling-up our domestic business."

He further said,"the acquired portfolio shall enhance Dr Reddy's presence in the high growth therapy areas with market leading brands such as Practin, Zedex, Bro-zedex, Tryptomer and Biovac. We believe the portfolio holds a lot of potential and will get an impetus under Dr Reddy's."

The transaction is expected to be closed in the first quarter of financial year 2020-21.

After the sale of the select business, Wockhardt said it would continue to own all international operations in UK, USA, Ireland and other locations through its step down subsidiaries.

The formulation plants located at Waluj, Shendra and Chikalthana in Aurangabad, Bhimpore and Kadaiya in Daman; bulk drugs plant at Ankleshwar, India and manufacturing facilities at all existing international locations would also continue to be owned by the company.

Wockhardt said its research and development centers located at Chikalthana, Aurangabad, India and existing facilities in the international locations would also continue to be under its fold along with a significant part of domestic branded business constituting chronic and speciality portfolios.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, February 12 2020. 13:20 IST