Mumbai: Cadila Healthcare Ltd (Zydus Cadila) has acquired Mumbai-based Biochem Pharmaceutical Industries Ltd for an undisclosed sum to strengthen its formulations business.
Biochem, which sells antibiotic, anti-diabetic, oncology and cardiovascular drugs, had reported sales of Rs 264.5 crore in the year ended 31 March.
Pankaj Patel, chairman, Zydus Cadila.
“The formulations business in India has always been the bulwark of our operations and we have looked at every strategic opportunity to grow and contribute to this market,” said Pankaj Patel, chairman and managing director, Zydus Cadila. Biochem has a significant presence in our core therapy areas, he said.
Established in 1959, Biochem has a manufacturing facility in Daman and exports to eight countries, including Thailand, Malaysia, Kenya and Sri Lanka. Its five brands—Ampilox, Biotax, Monotax, Amicin and Zithrocin—account for 40% of its sales, Zydus said in the release.
“Biochem has a good fit with Zydus as the products complement each other and add value to their product offerings in key growth segments,” said Mayank Shah, Biochem’s joint managing director.
Zydus’ earlier acquisitions include Germany’s Bremer Pharma GmbH in July. It is currently increasing focus on biotech related products and vaccines. It has a presence in pharmaceutical markets in Europe, Japan, Brazil, the US and South Africa.
“There seems to be no rational explanation for the acquisition unless it is part of Cadila’s plan to achieve its target of reach $3 billion by 2015,” said an analyst at a foreign brokerage. He did not want to be named as he is not authorized to speak to the media.
Cadila’s formulations business accounts for 38% of its revenue, but the contribution of the domestic market has been declining. In June 2010, the India accounted for 17.3% of its formulations business. In September this year, the share of the domestic market had declined to 6.6%.
Cadila’s share price fell 0.98% on Wednesday on BSE to close at Rs 701.50. The benchmark Sensex rose 3.36% to 15,685.21 points.