Zydus Cadila, Boehringer in joint venture talks

The city-based Zydus Cadila Healthcare has entered into a long-term strategic tie-up with Boehringer Ingelheim India, whereby Zydus Cadila will manufacture and market Boehringer Ingelheim's products in India. Boehringer Ingelheim India is a wholly owned subsidiary of Germany's pharmaceutical company Boehringer Ingelheim.

According to the agreement, Zydus Cadila will mainly manufacture and market the products Dulcolax and Buscopan in the gastro-intestinal segment and Actilyse in the cardiovascular segment.

These products are popular in their segments in the Indian market. The two companies have also begun talks on setting up of a new joint venture, which will manufacture and market new products of Boehringer in India.

"We have already begun to work out a model where all new products of Boehringer will be manufactured and marketed in India through the joint venture," Cadila executive director J C Jani said on Friday. Jani was the managing director of German Remedies, which recently merged with Zydus Cadila.

The long-term agreement between the two companies follows the setting up of a wholly owned subsidiary, Boehringer Ingelheim India by the parent company.

Boehringer Ingelheim will use the Indian subsidiary as the vehicle to expand its presence in the country, given the future potential in India.

Boehringer Ingelheim was one of the collaborators of German Remedies. Over the past 40 years, products of Boehringer have been manufactured and marketed by German Remedies in India.

With this pact, Zydus will continue to manufacture products of Boehringer in India for a period of ten years.

The term can be extended by another five years by mutual consent. The products will be manufactured at Zydus Cadila's plant at Moraiya on the outskirts of Ahmedabad.

The Boehringer Ingelheim group ranks amongst the 20 top pharmaceutical corporations of the world and operates globally with 156 affiliates in 44 countries.

Founded in 1885, the group posted a net sales of 7.7 billion euro and spends one-fifth of the net sales of its prescription medicines segment on research and development.

Jani said the association with the Boehringer Ingelheim group with the erstwhile German remedies meant that Rs 40 crore of the total Rs 300 crore sales per year were from manufacturing and selling Boehringer Ingelheim products.

"These are high-margin drugs and the revenue per year to Zydus Cadila through the pact will be substantially higher than that in the earlier year," he said.