Eris Lifesciences will acquire a part of Glenmark's dermatology portfolio for Rs 340 crore in the Indian market. The company will acquire nine trademarks of Glenmark's dermatoloty portfolio along with line extensions. This is Glenmark's second sale of its non-core assets in a month after divesting cardiac brand Razel to JB Chemicals and Pharmaceuticals for Rs 313.7 crore.
The deal is valued at 3.9 times trailing sales for the previous financial year, which is largely in-line with the 3.5x-5x valuation of previous deals that took place.
The brands – Onabet, Halovate, Sorvate, Luligee, Demelan, Aceret, Dosetil, Revize, Powercort, and sub-brands (topical dermatology, corticosteroids, psoriasis, demelanising) – made a revenue of Rs 87.3 crore in FY22. Three of these brands – Onabet, Halovate, Sorvate – are ranked No 1 and three are among the top three brands in the segment.
| Sales (Rs crore) | |
| FY20 | 91.1 |
| FY21 | 80.6 |
| FY22 | 87.3 |
A positive impact is expected for both the companies. For Eris, transaction is expected to help strengthen medical derma portfolio. The market share for Eris in the covered derma market will rise to 4.6 percent against 2.8 percent earlier, and derma's contribution will rise to 12.7 percent vs 7.6 percent of sales for the company.
Glenmark is ranked second in dermatology in India.
For Glenmark, this is the second sale of non core asset in just about a month. Earlier on December 15, Glenmark announced divesting cardiac brand Razel to JB Chem for Rs 313.7 crore.
Besides the deal, Eris Lifesciences also reported its December quarter earnings, where revenue grew 27 percent from last year. However, the company's standalone revenue growth of 9 percent is lower than the mid-teens expectations that the street had. EBITDA margin for the quarter also fell 460 basis points to 32 percent while net profit remained flat.
First Published: Jan 18, 2023 7:37 AM IST
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