The portfolio that will change hands forms a part of Wockhardt’s domestic branded business, with the deal including 62 products and a manufacturing facility in Himachal, India. Dr Reddy’s will acquire the assets from its fellow Indian company for INR 1,850 crore ($259m).
Wockhardt explained the decision by stating that the sale would allow the company ‘adequate liquidity’ for its international operations and to invest in its biosimilars for the US market.
The company also positioned the divestment as a means of repositioning its portfolio of products to focus on the chronic disease segment, including its treatments for diabetes and the central nervous system, as well as its antibiotics business.
Dr Reddy’s stated that treatments included in the deal ranged across respiratory, neurology, hormone therapy, dermatology, gastroenterology, pain and vaccines.
G. V. Prasad, managing director of Dr Reddy’s, stated that the acquisition will help the company ‘scale-up’ its domestic business. The acquired business divisions are predominantly based in India, but also within Nepal, Sri Lanka, Bhutan and the Maldives.
Wockhardt revealed that revenue from the portfolio sold to Dr Reddy’s represents approximately 15% of its consolidated revenue for the nine-month period ending December 31, 2019.
The deal is expected to close by May 2020.
