Dr Reddy’s Laboratories (DRL), one of India’s leading pharmaceutical companies has announced the acquisition of 62 brands and a manufacturing facility from Wockhardt for Rs 1,850 crore according to a Business Standard report. An agreement has been signed between the two companies, by which Wockhardt will turnover its manufacturing facility in Baddi, Himachal Pradesh along with the personnel employed there. Similarly, the marketing team handling these drugs will now stand transferred to the roles of DRL.
The 62 formulations covered under this agreement are for treatment of multiple diseases and for applications like respiratory, neurology, VMS, dermatology, gastroenterology, pain and vaccines.
Dr Reddy’s Laboratories has its presence in the Indian as well as international markets. Through this acquisition, the company will find its domestic market exposure expand to a considerable extent. The final formalities of the agreement may be concluded in the first quarter of the new financial year commencing April 2020.
This is the second such India-focused business acquisition by Dr Reddy’s. The earlier one was from UCB, a Belgian company which had its interests in India, Sri Lanka, Nepal and Maldives. Dr Reddy’s paid Rs 800 crore to takeover a few products from UCB’s portfolio which were also meant for areas like dermatology, respiratory diseases and for treatment in pediatrics. In that transaction too, 350 UCB employees came into the DRL fold.
Dr Reddy’s Laboratories has already declared its ambitions of growing into becoming one of the top five pharmaceutical companies in the country. It might want to expand into some of the emerging markets too, where opportunities exist.
Penetrating the advanced markets like the US is not very easy. While the profit margins may be high, the regulations and restrictions are also quite severe.