Hyderabad-based drug maker Granules India Limited has acquired the entire stake of unlisted Auctus Pharma, a manufacturer of active pharmaceutical ingredients (API) for Rs 120 crore. The acquisition process is expected to be completed in the next three to six months.
Auctus has an API facility at the Pharmacity in Vishakhapatnam and an intermediate facility in Hyderabad. The API facility has approvals from leading regulatory agencies including the US Food and Drug Administration, European Directorate for the Quality of Medicines & Healthcare (EDQM), Health Canada, Korea Food and Drug Administration and WHO-Good Manufacturing Practices. .
“The acquisition of Auctus fits into our strategy of being a fully integrated manufacturer while diversifying our product portfolio by adding high-value products with significant market demand. We will be a market leader by implementing our operational excellence philosophy while leveraging Auctus regulatory approvals,” Granules India managing director, Krishna Prasad, stated in a press release.
Prasad told Business Standard that Auctus would be adding to Granules top line about Rs 140 crore and Rs 4-5 crore to the bottom line this year. "The advantage will come after 3-4 years. The main idea behind the acquisition is to get raw material for our finished dosages", he said.
Granules posted a turnover of about Rs 750 crore and a net profit of Rs 30 crore in 2012-13. During the first half of the current financial year, it's profit after tax stood at Rs 31 crore. Prasad said that the company would continue to register its annual growth rate of 35-40% and was expected to post a turnover of about Rs 1,100 crore this year.
"We want to unlock our investment value and subsequently set up a greenfield pharmaceutical unit", a co-promoter of the 10-year old Auctus Pharma, Shivaram Prasad Aluru, told Business Standard while explaining the reasons for the sale of the company.
Auctus’ product portfolio includes twelve APIs including APIs in several therapeutic categories such as antihistaminic, antihypertensive, antithrombotic and anticonvulsant as well as other therapeutic categories. It currently sells its APIs and intermediates to customers in 50 countries. The team and assets from the acquisition will initially operate as a separate division with Granules.
Granules also announced the opening of a 10,000 square foot research and development (R&D) facility in Hyderabad. The new R&D will focus on full scale generic API development and will supplement the company’s existing R&D facility in Pune, which currently focuses on sustainable technology development.
“The acquisition is one part of our three-prong growth strategy. We remain committed to building on our position as a global leader for our existing products which include paracetamol, metformin, ibuprofen and guaifenesin. We will continue to strengthen our lead over others by focusing on continuous improvements and capacity enhancements in existing and new products. In addition, our team is eagerly awaiting the commercialization of our third growth driver, Granules OmniChem, a collaboration with Ajinomoto OmniChem, a premier CRAMs manufacturer” Granules India executive director, Harsha Chigurupati, added.
