The shares of pharmaceutical major Dr Reddy's Laboratories Ltd dipped 2.41% in early trade despite the company announcing an agreement to get Mayne Pharma’s U.S. generic prescription product portfolio for $105 million (around ₹870 crore), subject to completion of customary closing conditions. The acquisition will complement Dr. Reddy’s U.S. retail prescription pharmaceutical business with limited competition products.
The stock opened a gap-down at ₹4,489.10 on the Bombay Stock Exchange (BSE) and soon fell further intra-day low of ₹4,386.25. The pharma stock is currently trading below its 52-week high of ₹4,645.55 touched on November 2, 2022. With the current share price, Dr Reddy's m-cap stands at ₹ 73,107.85 crore.
Dr. Reddy’s today entered into a definitive agreement to get the U.S. generic prescription product portfolio of Salisbury, Australia, based Mayne Pharma Group Ltd. The portfolio includes 45 commercial products, four pipeline products and 40 approved non-marketed products, including many generic products, focused on women’s health, the company informed via a stock exchange filing. For the financial period ending June 30, 2022, Mayne Pharma reported total revenue of $111 million (USD) for the acquired portfolio.
"Approved high-value products include a hormonal vaginal ring, a birth control pill and a cardiovascular product. Under the terms of the agreement, Dr. Reddy’s will get the portfolio for an upfront payment of approximately $90 million (USD) in cash, contingent payments of up to $15 million (USD), consideration towards inventory and credits for certain accrued channel liabilities to be determined on the closing date," the company statement said.
The acquisition provides the company's North American unit with a significant foothold in the women’s health space, according to Marc Kikuchi, chief executive officer, North America business. "The acquisition aligns with our stated strategy to enhance our portfolio in our chosen growth markets. We are well-positioned to integrate the portfolio and grow the business successfully.”
Dr Reddy's CEO Erez Israeli the U.S. has always been an important market for the company. "The portfolio of products acquired from Mayne Pharma is a strategic fit with our growth objectives. The portfolio includes some high entry-barrier products. It also complements our existing portfolio by introducing products focused on women’s health. Our strong balance sheet enables us to acquire products of strategic importance to strengthen our base business and build for long-term growth.”
Notably, the value of the total addressable market for the pipeline and approved non-marketed products in the U.S. is around $3.6 billion for the calendar year ending in December 2022.
Earlier this month, Dr. Reddy’s was included in the Bloomberg Gender-Equality Index (GEI) 2023 for a sixth consecutive year, making it the only Indian pharma company to be listed in the index that includes 484 companies representing 11 sectors, 45 countries and a market capitalisation of $16 trillion. The index measures gender equality across internal company statistics, employee policies, external community support and engagement, and gender-conscious product offerings.
For the quarter ending December 31, 2022, Dr Reddy's reported a consolidated quarterly profit of ₹1,247.1 crore, up from ₹706.5 crore in the year-ago period. Its quarterly revenue from operations had surged to ₹6,770 crore as compared to ₹5,319 crore consolidated profit in the year-ago period.
