Eris Lifesciences buys Strides' branded generic biz for Rs 500 cr

A move that will strengthen the position of the Ahmedabad-based Eris Lifesciences Limited in the Central Nervous System (CNS) segment, the company on Saturday announced signing of a definitive agreement with Strides Shasun Limited to acquire its branded generics business. The deal - likely to be closed in two weeks - is estimated at around Rs 500 crore.

To be funded by a mix of internal accruals and debt, the acquisition - fourth and the largest in 18 months - will put Eris among the top ten companies in the CNS segment. Eris, having a market cap of Rs 8045 crore as on November 17, already has strong presence in the cardiology segment and ranks among the top ten in the diabetology segment.

Strides’ India branded generics business comprise of a portfolio of over 130 brands in the domains of Neurology, Psychiatry, Nutraceuticals, Gastro etc. along with the employees forming part of the business.

As per the terms of agreement, Eris will acquire the marketing and distribution rights for the said portfolio of products in India while Strides will retain the global rights for these products. The decision came after the company's board meeting held on Saturday.

Post-acquisition Eris will break into the league of top 25 companies having a market share of more than 1 per cent in the Indian Pharmaceutical Market.

"There is a lot of synergy in the portfolio. This portfolio will propel us well in the CNS portfolio, which is the third largest and one of the most attractive because of the aging population. This acquisition Will make the company one of the significant players in the CNS segment," Amit Bakshi, Managing Director Eris Lifesciences Limited told Businessline.

In Company's CNS portfolio, there are 10-15 brands, with a total size of the portfolio of about Rs 50-60 crore as per the last year's calculations. Company's flagship brand - Reverve itself is worth Rs 70 crore.

Since inception in 2007, Eris has focused on the chronic segments of cardiology and diabetology. Eris had forayed into the CNS segment only recently. This acquisition cements Eris’s position in the top three chronic segments.

Eris Lifesciences posted net profit of Rs 92.2 crore for the second quarter ended September 2017 as against Rs 66.2 crore in the same quarter a year ago.

Company's total income stood at Rs 229 crore for the quarter under review, up from Rs 201 crore in the corresponding quarter a year ago.

For the half year period (April-September), company's net profit stood at Rs 162 crore, up from Rs 128 crore in the corresponding quarter a year ago.

Total income for the period stood at Rs 398 crore, up from Rs 390 crore in the same period last year.