Aurobindo Pharma Ltd. announced on Tuesday its foray into the Indonesian market with the acquisition of 15 branded products from Viatris Inc. and Pfizer Inc.
The acquisition has been done for a cash consideration of $48 million or around Rs 400 crore, according to an exchange filing.
The acquisition of 15 specified marketing and manufacturing-related authorisations of branded products and related brand trademarks from Viatris and Pfizer "provides an excellent entry platform into (the) fast-growing pharmaceutical market of Indonesia," it said.
The brand acquisition is expected to be completed by Feb. 28 and it will require general approvals to complete the transaction.
The sales revenue generated from the specified brands in the Indonesian market is $30.5 million in 2022, $28.3 million in 2021 and $25.1 million in 2020.
Aurobindo Pharma's entry into the branded formulation market of Indonesia is in line with most Indian pharma companies looking beyond the U.S. markets as a part of their capital-allocation strategy to attain consistent growth after a gestation period.
This is despite a recovery that was seen in the U.S. market in the first quarter of the year in terms of easing of price-erosion pressures and in the light of drug shortages.
Manoj Garg, director of investments at WhiteOak Capital Management, had told BQ Prime earlier that while companies would have to build their sales, marketing and distribution network, steady growth and strong profitability outlook in branded markets makes them attractive.
In these markets, realisations are good and prices are stable like India, Garg had said. "Though it takes time to build front-end infrastructure, once you are there, profitability is very good."
Shares of Aurobindo Pharma were trading 0.25% lower at Rs 865.55 apiece on the BSE compared to an almost flat benchmark Sensex at 11:17 a.m.
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