JB Chemicals & Pharmaceuticals: JB Pharma open to more buys to grow branded biz share

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JB Chemicals & Pharmaceuticals (JB Pharma), controlled by US private equity firm KKR, is evaluating assets for acquisitions to bolster market share in the domestic branded formulation business, said its CEO Nikhil Chopra.

In an interview with ET, he said the assets should be at the right valuation, and have synergy with the existing business with a payback period of about seven to eight years and a potential to grow.

The company has been active in deal-making, investing nearly $200 million (₹1,650 crore) in four acquisitions in the past two years – Sanzyme’s probiotics portfolio, Novartis’ heart failure drug Azmarda, pediatric brands from Dr Reddy’s Laboratories and Razel (rosuvastatin) portfolio of Glenmark. The acquisitions boosted its annual revenue by ₹275 crore.

“There is no specific therapeutic area (for acquisitions). It all depends on what is available in the market. We also let go of some of the deals like Curatio, Biocon Biologics’ nephro and derma units, and Panacea domestic formulations,” Chopra said.

He expressed confidence about the company ending this financial year with mid-teens revenue growth, led by marketing beating chronic portfolio growth mostly dominated by the cardiology segment and contract research and development organisation (CDMO) business driven by increasing demand for lozenges as a cold remedy.

JB Pharma reported revenue of ₹3,149 crore for FY23, at a 24.3% operating profit margin. Its domestic formulation revenue was ₹1,640 crore, with the chronic diseases portfolio constituting 55% of domestic revenue. The share of CDMO business was 12%.Chopra said while acquisitions did add heft to the business, the contribution of legacy brands too doubled in the past three years.”When we came in, JB Pharma was essentially a four brands company – Cilacar (Cilnidipine), Nicardia (Nifedipine), both used in the treatment of hypertension, antacid Rantac (Ranitidine) and antibiotic Metrogyl (Metronidazole),” Chopra said. “While we are the market leaders in these products, there was an onus on us to grow the category. We did life-cycle management of our portfolio, we launched new products and extensions based on incremental innovation and feedback from doctor bodies, and initiated patient-centric campaigns in both chronic and acute segments,” he said.

Chopra said Cilacar-T, a combination pill of anti-hypertensive drugs Cilnidipine and Telmisartan, shown to be safe for use by patients with kidney disease, is now ranked in the top-300 brands in India’s pharma market, contributing ₹152 crore to the company’s revenue. Azmarda, acquired from Novartis, is clocking about ₹100 crore despite competition from generics, while probiotic brand Sporlac is expected to enter the top 300 soon, he said.

“We have made the organisation future-ready. The portfolio we have can last for the next decade, which was not (the case) three years ago. A lot of effort has been put in, a lot of discipline we brought in terms of what our medical reps are doing on the ground,” said Chopra.

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