PIRAMAL Healthcare has bought Cipla’s oral contraceptive brand, i-pill, for Rs 95 crore, to achieve its target of trebling its over-the-counter (OTC) drug business in three years.
I-pill is an emergency contraceptive brand that recorded Rs 31-crore sales last year.
Piramal CFO Rajesh Laddha said: “We have some capacity to make the drug; we will increase it. In the interim, we will source it.”
The all-cash acquisition of the brand is Piramal’s effort to grow its OTC drug business in India, Mr Laddha said. The company expects to treble its OTC drug sales in three years from around Rs 100- crore now, he added.
Cipla said it sold the brand because it wishes to focus on its prescription products. “i-pill has matured,” said Amar Lulla, joint MD Cipla said, “Servicing just one OTC brand is not a good idea. It needs a large support system, which is better used by someone who has a basket of OTC products.”
Piramal will scout for more such acquisition in the OTC segment, Mr Laddha said. “We have not set an amount that we expect to spend on such acquisitions.”
While pharmaceutical analysts said Cipla may have been able to get a better value, but Cipla’s Mr Lulla said: “It is a fair deal for both of us.”
Cipla will use the gains from the deal for internal expenditure. “It will go into the company’s pool, we have not earmarked the money for anything special,” Mr Lulla said. Shares of both companies rose around 3% in a steady Mumbai market.
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