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Lupin to buy remaining 40% stake in South African generic drugmaker Pharma Dynamics

16 March, 2015

Mumbai-based pharma major Lupin Ltd has entered into an agreement to acquire the balance 40 per cent equity stake in South African generic drugmaker Pharma Dynamics (PD) from its founders, as per a stock market disclosure.

It did not share the transaction value.

Founded in 2001, Cape Town-headquartered PD distributes a range of branded, generic prescription medicines and over-the-counter (OTC) products in South Africa as well as other markets across the African continent.

It is among the top 20 drugmakers in South Africa and the third-largest generics firm in the prescription drugs market in the country.

In 2008, Lupin acquired a strategic 60 per cent equity stake in the firm. The founders of the firm, who had retained a minority stake, are now exercising the put option before March 31, 2015, which would make it a wholly owned company of Lupin.

Today, PD is the top player in cardiovascular pharmaceuticals in its home market and its products also address therapies such as central nervous system (CNS), gastrointestinal, diabetes and gynecological and male health segments. In 2013, it also entered the anti-infective market, supplying IV antibiotics to hospitals.

Its OTC products portfolio includes antihistamines, cold & flu medication and heartburn treatment.

The firm reported sales of Rs 380 crore for the year ended March 31, 2014  compared with Rs 321 crore in the previous year, representing growth of 18 per cent (in local currency terms, it grew even faster). Its net profit rose from Rs 59.26 crore to Rs 69.27 crore in the same period.

Paul Anley, CEO of Pharma Dynamics, said, “Lupin has been a strong partner since 2008 and we have had an excellent relationship. The fact that Lupin has increased its shareholding in Pharma Dynamics is a compliment and augers well for our continued success.”

For Lupin, which has been looking at inorganic expansion, especially overseas, this will add to international business.

Vinita Gupta, CEO of Lupin, said, “We are delighted with this development as Africa is fast emerging as one of the growth engines of the future. We are pleased that Paul Anley has agreed to continue as CEO.”

The South African pharmaceutical market is valued at about $3.5 billion with the generics market growing 6 per cent in value terms and 2 per cent by volume during FY14.

Lupin had been pursuing inorganic expansion during 2007-11, but has not been active on the M&A front since then. Early last year, it revived its M&A-led growth strategy as it acquired Laboratorios Grin S.A. De C.V, which marked the company’s foray into the high growth Mexican and the larger Latin American pharmaceuticals market.

It also acquired Dutch firm Nanomi B.V which enables it to manufacture complex injectables with innovative drug delivery systems. With the use of Nanomi’s proprietary technology platform, Lupin would be able to make significant inroads into the niche area of complex injectables.

Post these two deals, it roped in Theresa Stevens as chief corporate development officer from Aptalis for its global operations. Theresa is now responsible for global mergers and acquisitions (M&As) and specialty business strategy.

Lupin’s scrip ended at Rs 1,863.55 a share, down 0.77 per cent on the BSE, in a weak Mumbai market on Monday.

(Edited by Joby Puthuparampil Johnson)


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Lupin to buy remaining 40% stake in South African generic drugmaker Pharma Dynamics

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