Dr Reddy'S Buys 5 Brands From Dolphin

Pharmaceuticals major Dr Reddy's Laboratories has acquired five brands from Calcutta-based pharma company Dolphin Laboratories.

Belonging to therapeutic segments of haemostatics, antibiotics and hepato-stimulant/protectives, Dr Reddy's paid Rs 20 crore for these brands.

While Styptovit, Styptomet, Styptochrome belong to haemostatics, Doxt is the antibiotic and Trichodol is the hepato-stimulant/protective indicated in the treatment of acute and chronic liver diseases. Dr Reddy's has also acquired the manufacturing and marketing rights for a sixth brand, Dicynene, also a haemostatic.

Brokered by merchant bankers DSP-Merrill Lynch, the transaction has left Dolphin with manufacturing facilities which it will use to make products for others. There have not been too many cases of managements selling out their major brands and leaving the company intact. These brands contributed more than 90 per cent of Dolphin's turnover. Their sale will result in Dolphin relying heavily on contract manufacturing for future growth.

 

A small company, Dolphin also a large workforce of between 400-500 employees which is now being pruned using the funds from the sale. It was promoted by Chandrakant Gandhi, one of the brothers which promoted the Lyka family of companies like Gujarat Lyka and Lyka Laboratories.

In a statement, K Satish Reddy, managing director, Dr Reddy's Laboratories said, "the move reaffirms the company's strategy of achieving growth through brand acquisitions in the short term."

These latest additions to the company's portfolio are expected to add Rs 25 crore to its turnover in the first full year of marketing.

The company's brand equity with gynaecologists, surgeons, ENT and chest physicians, dentists and gastroenterologists is also expected to be strengthened.

With these brands under its belt, Dr Reddy's therapeutic profile has broadened from the existing categories of cardiovasculars, gastrointestinals, anti-infectives and pain management to haemostatics. The three haemostatics brands all have dominant market shares, the release added.

The company also recently announced progress in its drug discovery programme for bacterial infections, cancer and anti-peptic disease through the Dr Reddy's Research Foundation (DRF).

It is reportedly expecting another two instalments of milestone payments from Novo Nordisk, the Danish company which is its licensing partner for novel discoveries.

The company is also on the verge of signing a marketing joint venture with a Brazilian company Biochimico and finalising a manufacturing joint venture in China. The company has been hit by the turmoil in the Russian market with no deals being conclude in the past couple of months.

In the second quarter this year, the company posted turnover of Rs 109.6 crore, the bulk of it coming from the finished dosages segment.

Formulation export accounted for Rs 12.78 crore down from Rs 14.69 crore in the corresponding months, last year.