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Dr Reddy's is to acquire JB Chemical's pharma portfolio (non OTC) in Russia & CIS (FY11
revenues of ~US$20m) for US$ 34.85m. While DRL focus has been the OTC markets due to
Essential Drug List (wherein drug prices are regulated), this acquisition would add to it's existing
FY11 revenues of US$ 244m (+19%yoy).
Dr. Reddy's (DRL) has entered into an agreement to acquire JB Chemicals & Pharma's (Non
Rated) pharma prescription portfolio in the Russia and CIS markets for US$ 34.85m (Rs
1.57bn). The agreement involves the acquisition of 20 brands (largely catering to acute
therapies) with FY11 revenues of ~US$20m, key ones being Metrogyl (~US$ 11m) and Jocet
(~US$ 2m).
We note that JB Chemical sold its Russia & CIS (RCIS) OTC business along with OTC
brands in mid-July 2011 to Johnson & Johnson (non rated) for US$ 250m. We highlight that
since last year DRL has been focussing on shifting its pharma product portfolio from
prescription to OTC segment (has shifted the proportion of OTC from 25% in FY11 to 30% in
1QFY12) in RCIS markets due the introduction of Essential Drug List (DRL's 50-60% of
products comes under this category) wherein drug prices are regulated.
DRL has also entered into a supply agreement with JB Chemicals for the continued
manufacturing and supply of these products associated with the acquired brands. JB
Chemicals portfolio also includes products in the hospital segment where DRL has an
established presence through a field force and network of distributors in the RCIS Markets.
DRL also gains access to several hospital products in the pipeline, quite a few of which would
be first generic to launch.
We note that DRL entered the Russia market in 1992 and since then has build a strong
franchise in RCIS markets (now 15-165 of its total revenues) with FY11 revenues at Rs.10.9
bn (US $244m) which grew at 19%yoy. DRL expects similar growth rates for the acquired
business as this acquisition will help expand DRL prescription and hospital portfolio and
complement its existing strong basket of products e.g. Jocet would give DRL - a much
awaited entry into the US$ 256m cold and cough market. Two brands- Unispaz and Metrogyl
gel & Metrogyl vaginal gel further strengthens DRL's portfolio.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Dr Reddy's is to acquire JB Chemical's pharma portfolio (non OTC) in Russia & CIS (FY11
revenues of ~US$20m) for US$ 34.85m. While DRL focus has been the OTC markets due to
Essential Drug List (wherein drug prices are regulated), this acquisition would add to it's existing
FY11 revenues of US$ 244m (+19%yoy).
Dr. Reddy's (DRL) has entered into an agreement to acquire JB Chemicals & Pharma's (Non
Rated) pharma prescription portfolio in the Russia and CIS markets for US$ 34.85m (Rs
1.57bn). The agreement involves the acquisition of 20 brands (largely catering to acute
therapies) with FY11 revenues of ~US$20m, key ones being Metrogyl (~US$ 11m) and Jocet
(~US$ 2m).
We note that JB Chemical sold its Russia & CIS (RCIS) OTC business along with OTC
brands in mid-July 2011 to Johnson & Johnson (non rated) for US$ 250m. We highlight that
since last year DRL has been focussing on shifting its pharma product portfolio from
prescription to OTC segment (has shifted the proportion of OTC from 25% in FY11 to 30% in
1QFY12) in RCIS markets due the introduction of Essential Drug List (DRL's 50-60% of
products comes under this category) wherein drug prices are regulated.
DRL has also entered into a supply agreement with JB Chemicals for the continued
manufacturing and supply of these products associated with the acquired brands. JB
Chemicals portfolio also includes products in the hospital segment where DRL has an
established presence through a field force and network of distributors in the RCIS Markets.
DRL also gains access to several hospital products in the pipeline, quite a few of which would
be first generic to launch.
We note that DRL entered the Russia market in 1992 and since then has build a strong
franchise in RCIS markets (now 15-165 of its total revenues) with FY11 revenues at Rs.10.9
bn (US $244m) which grew at 19%yoy. DRL expects similar growth rates for the acquired
business as this acquisition will help expand DRL prescription and hospital portfolio and
complement its existing strong basket of products e.g. Jocet would give DRL - a much
awaited entry into the US$ 256m cold and cough market. Two brands- Unispaz and Metrogyl
gel & Metrogyl vaginal gel further strengthens DRL's portfolio.
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