Bangalore-based Biocon Ltd is looking to divest its majority stake in its German drug distribution subsidiary AxiCorp to the minority shareholders of the firm and take back licence rights for biosimilar insulin and glargine in Germany. Although Biocon did not say for how much it intends to sell the stake for, agency reports quoting Biocon CMD Kiran Mazumdar Shaw said that the firm is looking to pocket around €40 million or $58.7 million.
The country’s largest biotechnology firm Biocon had acquired 70 per cent in AxiCorp Gmbh for €30 million ($44 million) three years ago, to enable the marketing and distribution of a range of pharmaceuticals including generics, biosimilars, biologies and innovative pharmaceutical products in Germany and Europe. AxiCorp is a specialised marketing and distribution company established in 2002 by a group of industry experts to address the lucrative generics and parallel distribution market in Germany and Europe.
On Thursday, Biocon has said that its global alliance with world’s largest drug-maker Pfizer – struck last October – is behind the divestment decision as the synergies derived from the international deal with Pfizer can be leveraged for the German market as well. The deal with Pfizer gave the US-based drug-maker the global rights to commercialise biosimilar diabetes treatments.
Biocon will pocket around 33 per cent in gains in Euro terms but will pocket more in Rupee terms as Indian currency has depreciated against the Euro in the meantime.
AxiCorp, which contributed over a quarter of Biocon’s revenues, has been weighing on the financials of Biocon as the German government has asked for compulsory discounts from drug-makers to cut healthcare costs in the country.
Biocon scrip dropped 4 per cent to close at Rs 370 in a weak Mumbai market on Thursday.
Biocon reported 25 per cent rise in net profit for the fourth quarter ended March, 2011, that saw the total income rise by a modest 8 per cent to Rs 717 crore.
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