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Acquisition 2015-03-17

Pharma major Lupin to acquire remaining 40% stake in South African Pharma Dynamics

In a move to wholly own South African generic drugmaker Pharma Dynamics, Mumbai-based pharma major Lupin Ltd has entered into an agreement to acquire the balance equity stake of it.

Pharma major Lupin to acquire remaining 40% stake in South African Pharma Dynamics

Founded in 2001, South Africa’s Cape Town headquartered Pharma Dynamics (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.

Ranked among the top 20 drugmakers in South Africa, PD is the third-largest generics firm in the prescription drugs market in the country.

As per a stock market disclosure, 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.

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 prior to March end, which would make it a wholly owned company of Lupin.

Reportedly, PD is the top player in cardiovascular pharmaceuticals in its home market at present 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 and flu medication along with heartburn treatment. The firm reported sales of Rs 380 crore for the fiscal 2014 in comparison with Rs 321 crore in the previous year, representing a growth of 18 per cent. The net profit of the company rose from Rs59.26 crore to Rs 69.27 crore in the same period.

As informed by VC Circle, 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 Laboratories 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.

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