Lupin likely to sign $1.5 billion deal with Merck Serono

MUMBAI: Pharmaceutical major Lupin is in advanced talks to sign a blockbuster deal with Merck Serono, say sources close to the deal.

As part of the deal, Lupin will manufacture Merck Serono’s $1.5 billion worth branded mature drugs at its facilities. The company will also get marketing rights for the drugs for emerging countries and European markets.

Merck Serono will retain the rights to market these drugs in the developed markets.

“The branded drugs segment with sales close to $1.5 billion will have an EBITDA close to $900 million. Assuming 30 per cent margins; Lupin would make close to Rs 1500 crore on an operational level on this deal”, said an analyst who did not want to be identified.

Email queries sent to Merck Serono remained unanswered. Lupin indicated that they do not comment on market speculations.

For FY14, Lupin sales were Rs 11,086 crore on a consolidated basis with an EBITDA of Rs 3003 crore and a profit of Rs 1,837 crore.

The stock was trading higher by 4.5 per cent at Rs 1,420. It touched high of Rs 1,420 and low of Rs 1,351.80.