Eris announces the acquisition of Nephrology and Dermatology Branded Formulations business units of Biocon Biologics in India.Eris Lifesciences Ltd., a leading Indian branded formulations manufacturing company, has signed a definitive agreement today with Biocon Biologics Ltd. to acquire its Branded Formulations’ India (BFI) business units of Nephrology and Dermatology.
The business includes over 20 mother brands with FY23 Revenue of INR 90 cr. and current revenue run-rate of INR 100 cr. The deal consideration is INR 366 crore inclusive of working capital conveyed as part of the deal. The key leadership and entire field force of this business, consisting of over 120 personnel are expected to move to Eris post deal.
Eris has historically leveraged acquisitions to enter new therapies; it entered Neuropsychiatry in 2017 through the acquisition of Strides Shasun’s domestic business and entered Dermatology in 2022 through the acquisition of Oaknet Healthcare, followed by brand portfolios from Glenmark and Dr. Reddy’s in early 2023. The acquisition of two of Biocon’s BFI business units in India marks the entry of Eris into Nephrology. This is a strategic addition to Eris’ flagship cardiometabolic business and post deal Eris will offer end-to-end care to patients starting with Diabetes/ Hypertension and all through to Chronic Kidney Disease (CKD).
The acquisition of Biocon’s BFI business units also enables Eris to consolidate its position in Dermatology. Post deal, Eris would become the 2nd largest player in Psoriasis with a 11% market share. Dermatology is all set to become Eris’ third largest therapy soon, after Diabetes and Cardiovascular. With dominant market positions in 3 of the Top-5 chronic therapies, Eris is well-positioned to deliver market leading growth in the years to come.
Commenting on the acquisition, Amit Bakshi, Chairman & Managing Director of Eris Lifesciences Ltd., said,“We have successfully demonstrated our ability to turn around and create value in acquired businesses. The acquisition of Biocon Biologics’ Nephrology and Dermatology branded formulations businesses in India is in line with our strategic goals as well as our capital allocation framework. We are very happy to welcome domain experts in Nephrology and Dermatology from Biocon. I look forward to all of us working together to build a large franchise that will deliver immense value to patients. I am confident that this acquisition will deliver value to shareholders in line with the deals we have done in FY23 and prior.”
Shreehas Tambe, CEO & Managing Director, Biocon Biologics Limited, said:
“This divesture of non-core assets allows Biocon Biologics to unlock value within our Branded Formulations portfolio in India and sharpen focus on our core therapy areas like Diabetes, Oncology and Immunology. We believe that Eris Lifesciences is well positioned to build further on the Dermatology and Nephrology franchise in India. Biocon Biologics remains committed to successful transition of employees of these business units, our product brands, customers to ensure continuity for patients and market outreach.”
Key deal highlights
· The business had an FY23 revenue of Rs. 90 cr. and has a current revenue run-rate of INR 100 cr. p.a.
· The deal consideration is INR 366 cr. inclusive of working capital and will be funded partly through debt financing
· Post deal Eris will become the 2nd largest player in Psoriasis with a market share of 11%.
· Power brands like Tacrograf and Renodapt in Organ Transplants and emerging brands like Bionesp and Erypro in CKD-induced anaemia provide a strong platform to kick-start the Nephrology franchise at Eris
· Leading brands like Psorid, Tbis, Picon and Calpsor will complement existing Medical Dermatology portfolio of Eris
· Key leadership and entire field force consisting of 120+ personnel expected to move to Eris post deal
· The transaction is expected to achieve financial closure by end of 2023.