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Piramal buys drug rights from Cipla for $21mn

Piramal buys drug rights from Cipla for $21mn
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First Published: Tue, Mar 23 2010. 03 05 PM IST
Updated: Tue, Mar 23 2010. 03 05 PM IST
Mumbai: Indian drugmaker Piramal Healthcare has bought the rights for Cipla’s emergency contraceptive drug i-pil for Rs950 million ($21 million), a senior official said, as it seeks to more than double its over-the-counter offerings in three years.
i-pill had sales of about Rs310 million a year, Rajesh Laddha, chief financial officer of Piramal Healthcare, told Reuters.
Piramal shares extended gains to 4.6% on the news and Cipla added 3.1% in a Mumbai stockmarket.
“We have a lot of thrust on the OTC business going forward,” Laddha said, referring to drugs that are sold without a doctor’s prescription.
Piramal currently sells OTC drugs worth about Rs1.25 billion a year, and i-pill would add to the revenue but would be neutral in terms of profit in the near term because of interest and depreciation costs, Laddha said.
The acquisition will be funded through internal accruals and short-term loans, he said.
The OTC market in India is estimated to be worth about $1.8 billion and is growing annually at 18%, Piramal said in a statement.
Piramal has been buying brands, including from India-based Khandelwal Labs, PlasmaSelect in Germany and RxElite Inc and Minrad International in the United States.
Cipla’s joint managing director, Amar Lulla, had told Reuters on Monday the company was in talks with Piramal for selling i-pill as it wanted to focus on prescription drugs.
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First Published: Tue, Mar 23 2010. 03 05 PM IST