Strides to buy Grandix products

The Bangalore-based pharmaceutical firm Strides Arcolab will soon take over the pharmaceutical brands and related assets of Grandix Pharmaceutical, Chennai.

Grandix, with a turnover of Rs 50 crore, had divested its manufacturing plant to the Iceland-based generic pharma major Actavis for an undisclosed amount last December.

Its flagship brand 'Renerve' is the market leader in the diabetics neuropathy (damage to nerves caused by diabetes) segment in India with a turnover of Rs 22.5 crore sales in 2006. Grandix, which is only in the pharmaceutical marketing space, has a field force of 265 medical representatives and sells about 150 products in various therapeutic categories. It is also in the process of recruiting 105 medical representatives more.

Arun Kumar, vice-chairman and chief executive officer (CEO) of Strides Arcolab, said due diligence for Grandix would begin soon and the deal could be completed within this quarter. The board of directors of the Rs 760 crore Strides has given in-principle approval to acquire the entire shareholding of Grandix.

"Discussions were on for sometime since Grandix has some good brands such as Renerve, a market leader. It is too early to comment on the valuation," said Kumar.

"Our core competence is brand building and we plan to double our turnover by the year end. We are also adding products in the immunosuppresents, oncology and anti-infectives segments, which will act as a strategic fit for Strides on completion of the takeover," said S A Manikandan, executive director and a promoter of Grandix. Along with him, Grandix is promoted by S Arul Rhaj (chairman) and A Ramamurthy (managing director), two prominent medical practitioners in Tamil Nadu.

Manikandan said Grandix has prominent brands in neuropathy, anti-diabetics and pain management with extensive field operations in about eight states. Iscept, its anti-diabetic brand, has sales of above Rs 3 crore and its pain management products contribute more than Rs 4.5 crore to the kitty. The company currently outsources manufacturing of certain products from contract manufacturers in Baddi, following the sale of its plant.