Cipla plans to divest consumer healthcare business

In order to further consolidate its core pharmaceutical business, Cipla Ltd is planning to divest its consumer healthcare business to a yet-to-be-announced wholly-owned subsidiary for Rs 10.5 crore. “The board of directors of the company at its meeting held on July 09, 2015 approved divestment of its consumer healthcare business to a wholly owned subsidiary (proposed to be incorporated) on a going-concern basis by way of a slump sale for a consideration of Rs 10.5 crore,” said Cipla in a BSE filing on July 9, 2015.
 
The divestment is expected to help Cipla participate in the attractive and growing over-the-counter (OTC) market. “This business requires a specialised FMCG kind of focus. A separate subsidiary would enable Cipla to attract right talent and provide the focus and attention required for this business,” added the company.
 
The OTC division recorded Rs 34.88 crore turnover or approximately 0.3% of the total consolidated income of Cipla for 2014-15. The net worth of OTC division as on March 31, 2015 was Rs 6.45 crores contributing 0.06% of the net worth of the company. The transaction is expected to be completed in the third quarter of FY 2015-16, subject to receipt of necessary approvals, Cipla added.

Subhanu Saxena, MD and Global CEO, Cipla said, “I am very pleased that the company is making such a positive move into the consumer healthcare space. There is a very good opportunity for Cipla, a company which has contributed immensely to patient health, to also contribute to patient wellness. The over-the-counter business means that we can speak to the patient directly and help them to foster good health and illness prevention.”
 
OTC division recently launched its first product Nicotex, a gum which helps smokers quit the habit. This product is a switch from Cipla’s prescription business and has had a very successful launch in the South of the country, claims the company.