Shares of Glenmark Pharmaceuticals Ltd ended at Rs 439.40, up by Rs 5.95, or 1.37 percent on the BSE. Recently, the US Food and Drug Administration (FDA) flagged various lapses, including failure to establish required laboratory control mechanisms, at Glenmark's Goa-based manufacturing plant.
JB Chemicals is looking to double its revenue in the cardiac market within the next 3-4 years. As a result, it has now acquired Glenmark Pharma's cardiac brand Razel in India and Nepal for a total consideration of Rs 313.7 crore.
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In the Rs 23,000 crore cardiac market, JB Chemicals ranked as the 13th largest company in 2020, which improved to 11th in April 2022 when JB Chemicals acquired the Azmarda brand from Novartis AG for Rs 246 crore. With the acquisition of Razel, JB Chemicals will now be the 8th largest company in the cardiac market with a market potential of Rs 2,500 crore.
"We are improving rank as well as market share," MD & CEO Nikhil Chopra told CNBC-TV18 in an interaction on Thursday.
Chopra is expecting this segment to grow in the low double-digit to mid-teens in the next few years. Razel's current revenue stands at Rs 60 crore with a gross margin of 80 percent, and EBITDA margin of 55-60 percent
On its part, going forward, Glenmark said it will continue to further consolidate its position in its core therapeutic areas of cardio‐metabolic, respiratory, dermatology, and oncology.
JB Chemicals has funded 70-80 percent of the overall consideration via long-term debt and the rest will be funded through cash generated by the business.
Chopra further added that the Razel business is expected to clock in revenue worth Rs 100 crore by financial year 2026-2027.
JB Chemicals continues to look for opportunities in the Indian market, according to Chopra. However, he would only want to look at opportunities which are accretive to the company's operating profit or EBITDA.
"Even though we are paying 4-5x of revenue for Razel, the EV/EBITDA is only 9-10x which helps us being EBITDA accretive on an overall basis," he said.
Shares of JB Chemicals are trading 1.5 percent higher at Rs 2,055.20 while those of Glenmark are down 0.3 percent at Rs 438.20.
(Edited by : Shoma Bhattacharjee)
First Published: Dec 14, 2022 6:31 PM IST
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