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Eris Lifesciences on the lookout for acquisitions of brands, product portfolios

The company shortlists therapy segments such as cardio, diabetes, vitamins, neuro, dermatology and women's health for buyouts. COO says there are opportunities coming from multinationals and large domestic companies.

July 30, 2021 / 12:10 PM IST
Eris Lifesciences Ltd.

Eris Lifesciences Ltd.

 
 
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Ahmedabad-based drug maker Eris Lifesciences said it is on the lookout for acquiring brands and product portfolios. The company said it has shortlisted therapy segments such as cardio, diabetes, vitamins, neuro, dermatology and women's health for buyouts.

“There are opportunities coming, especially from multinationals looking to prune their portfolio from time to time. Even large domestic companies are there. We do see the deal following, but it has to be something that fits most of our parameters," said V Krishnakumar, Executive Director and Chief Operating Officer, Eris Lifesciences, in an interview to Moneycontrol.

“If it is a portfolio that comes with two or three other things, that becomes an opportunistic bolt-on,” Krishnakumar said.

Eris, in 2017, bought the Indian branded formulations business of Strides for Rs 500 crore.

Future growth

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On future growth, Krishnakumar said the company expects 15 percent revenue growth in FY22, with 10 new launches. The company has launched three products in the first quarter and expects the second half to be heavy in terms of new launches.

“As far as the medium- to long-term growth is concerned in the cardio, metabolic and vitamins market that we are present in, we expect this market to grow at 10-12 percent. We will outperform the market by 200-300 basis points," Krishnakumar added.

About 85 percent of the company's revenues comes from the chronic segment.

Eris reported net profit of Rs 107 crore for the quarter ended June 30, up 20 per cent year-on-year. Revenue from operations stood at Rs 349 crore in Q1FY22.

The chronic segment underperformed, compared to the acute segment in Q1FY22. The acute segment consists of drugs such as antibiotics, gastro and pain, among others, while the chronic segment consists mostly of diabetes, hypertension and neuro where the patient has to pop pills on a daily basis.

Krishnakumar expects things to normalise.

“If there is no third wave or the third wave is of low magnitude, the trend will normalise. The chronic therapies will eventually grow faster than the acute segment," Krishnakumar said.

Productivity

Eris is among the very few pharmaceutical companies that declares its per-capita marketing representative (MR) productivity. It said it has closed with productivity of Rs 5 lakh per MR in Q1FY22.

Krishnakumar said while productivity is an important metric for the company, the focus is more on growth through product launches, line extensions and brand building.

“Our primary target is growth. Productivity will happen as a logical consequence," Krishnakumar said.

"In both acute and chronic segments, when the markets become tight from a doctor visit perspective, established brands have done very well compared to smaller brands. Because we have been there for the last 14 years, we have built big brands, so that is the impetus for us," Krishnakumar added.

Eris is also planning to set up a formulation manufacturing facility in Gujarat, with a capex of Rs 120- 130 crore in the first phase. Currently, Eris has  a manufacturing facility in Guwahati, Assam.
Viswanath Pilla is a business journalist with 14 years of reporting experience. Based in Mumbai, Pilla covers pharma, healthcare and infrastructure sectors for Moneycontrol.
first published: Jul 30, 2021 12:10 pm
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