Indoco Remedies plans Rs 42 cr buy in Germany

The German buy will facilitate Indoco's entry into European markets.

The Rs 215 crore Indoco Remedies is planning to buy out a drug dossier development company in Germany for an approximate valuation of Rs 42 crore (¤7.5 million). Indoco had shortlisted proposals from three companies for the proposed acquisition in Germany.

The German dossier development company that has several product licences would offer a broader portfolio of generics and branded generics readily to Indoco for its entry into European markets, said sources close to the development.

"Indoco would be raising the required funds through term loans and the deal is likely to be closed shortly," a source said.

Indoco executives, though confirmed that the company is on the look out for suitable acquisitions that would enable a strong entry into the European markets, said that it has not yet identified any particular company.

Indoco Remedies, which went public last year, is currently focusing on exports to the US and European markets. It has already filed two ANDAs (abbreviated new drug applications) in the US and proposes to file five more this calender year. The market size of these products aggregates to $1.1 billion.

In the US, Indoco has signed agreements with two generic companies. Indoco would be initially supplying finished dosage from its Goa facility to these companies.

The company would eventually form marketing joint ventures in the US and European markets, said the sources.

In the meanwhile, Indoco has received the US FDA approval for its sterile ophthalmic preparations facility at its Goa plant. This will facilitate the production and export of the company's ophthalmic preparations to the US.

Established in 1947, the company has good domestic presence and almost 82 per cent of the sales is from the domestic market currently. The company, which is also planning to undertake more contract manufacturing projects once its new API facility near Mumbai is ready for operations, is expecting to increase the export revenue to 50 per cent in a couple of years.

The company is currently present in the therapeutic areas of anti-infectives, anti-spasmodics, anti-cold, oral hygiene, ophthalmic and lifestyle product segments. The company has manufacturing facilities at Mumbai, Tarapore, Goa and a recently commissioned plant at Baddi in Himachal Pradesh.

The company is setting up an R&D unit for APIs at Rabale near Thane and a greenfield unit for API production at Ambernath.