Mumbai: Expanding control over overseas business arms, midsize Indian drug makers Strides Arcolabs Ltd and Elder Pharmaceuticals Ltd have raised their interests in foreign joint ventures in two separate developments announced on Thursday.
The Bangalore-based Strides said it has bought the full 50% stake of its foreign partner, South Africa-based Aspen Pharmacare Holdings Ltd, in two of its joint venture companies, Onco Therapies Ltd and Onco Laboratories Ltd, based in India and Cyprus, respectively.
Elder Pharmaceuticals, promoted by the Mumbai-based Saxena family, has increased its stake in its Bulgarian subsidiary Elder Biomeda AD to 61% from 51% for an undisclosed sum.
Elder had formed Elder Biomeda, which acquired 100% equity in three leading Bulgarian healthcare companies belonging to the Biomeda group.
“This shall be our strategic gateway to the European Union and CIS countries,” Alok Saxena, director, international, Elder Pharmaceuticals, said in a statement.
“Elder’s decision is on the back of its plan to out-license several products from its Bulgarian unit, and also to use this subsidiary to launch many generic products from Indian units in European and CIS markets,” said Ranjit Kapadia, vice-president, institutional research, HDFC Securities Ltd.
Strides and Aspen were equal partners in cancer drug manufacturing joint ventures in India as well as Cyprus. Under the new arrangement between the two partners, Aspen will sell its 50% ownership in these companies to Strides for $117 million (around Rs532 crore).
In return, Strides will license existing and future cancer products of Onco Therapies and Onco Lab to Pharmacare Ltd, an Aspen group company, for certain markets.
A Strides statement on Thursday said the transactions signal the strategic intent of both Strides and Aspen in the cancer therapy market.
“Strides’ strategy to have full control in these cancer joint ventures fits well in the context of its recent product supply agreement with Pfizer (Inc.) for a range of anti-cancer products for the global company’s developing as well as developed markets,” Kapadia said. “A 100% ownership in these companies will help Strides in attaining an additional production capacity before Pfizer orders start coming.”
Strides rose 3.55% to Rs339.40 on the Bombay Stock Exchange on Thursday. The Elder scrip remained flat at Rs360 while the benchmark Sensex index was little changed at 17,519.26 points.