Eris Lifesciences, a prominent pharmaceutical company focused on chronic therapy drugs, has finalized the acquisition of the India-branded formulation business of Biocon Biologics, a subsidiary of the biotechnology giant Biocon, for a sum of Rs 1,242 crore. This strategic purchase encompasses a broad range of portfolios in critical sectors such as insulin, oncology, and critical care.
The valuation of the transaction is based on an accretive multiple of 3.4 times the revenue and 18 times the earnings before interest, taxes, depreciation, and amortisation (EBITDA). As a result of this deal, more than 430 employees associated with Biocon Biologics’ business will be integrated into Eris, enhancing its operational and sectoral expertise.
A significant aspect of this acquisition is the 10-year supply agreement signed between Biocon Biologics and Eris, underscoring a long-term collaboration between the two companies. Set to become effective on April 1, 2024, this agreement aims to position Eris as a significant player in the Rs 30,000 crore injectable market, particularly in the insulin segment with key products like Basalog and Insugen from Biocon Biologics.
Krishnakumar Vaidyanathan, Executive Director and COO of Eris Lifesciences, highlighted the deal’s potential for in-house manufacturing evaluation in the future thanks to technology transfer provisions included in the supply contract. Vaidyanathan also pointed out the financial strategy post-acquisition, noting Eris’s preparedness to manage a debt of Rs 3,000 crore on its balance sheet through strong cash flows.
Amit Bakshi, Chairman and MD of Eris Lifesciences, expressed optimism about the acquisition, stating, “This deal, combined with the acquisition of Swiss Parenterals announced last month, will turbocharge our entry into the Rs 30,000-plus crore India-branded injectable market and pave the way for our next Rs 1,000 crore vertical in the next three to four years.”
On the other side, Shreehas Tambe, CEO and MD of Biocon Biologics, remarked on the strategic nature of the collaboration, “This strategic collaboration with Eris Lifesciences for our portfolio of metabolics, oncology, and critical care products in India aligns with our commercial strategy to maximise patient reach and market potential.”
The acquisition not only marks Eris’s robust entry into new therapeutic segments but also reinforces Biocon Biologics’ commitment to expanding patient access to its biosimilars in India. The transaction is anticipated to reach financial closure before April 15, 2024, setting a new course for both companies in the pharmaceutical and biotechnology landscape.
