Zydus Cadila in talks to acquire brands and manufacturing facility of Biochem Pharmaceuticals

MUMBAI: Zydus Cadila is in talks to acquire the brands and manufacturing facility of Biochem Pharmaceuticals, people familiar with the matter told ET. The deal is expected to be valued at around Rs 300-450 crore and will boost Biochem's revenue growth.

In fiscal 2009-10, Biochem reported revenues of Rs 241 crore. The company exports products to eight countries.

Biochem and Zydus did not respond to email queries from ET.

Biochem makes popular antibiotics such as Amicin or amikasin, which is used for dermatological treatment. Its other big brands include Ampilox and Biotax, commonly used as anti-infectives. These three drugs contribute close to 50% of the company's revenues. It also has a small portfolio of oncology products.

Ahmedabad-based drugmaker Zydus Cadila, with a market cap of Rs 3,700 crore, has been on the hunt for companies that are small in size and have specific product pipelines. In June, its US subsidiary Zydus Pharma Inc acquired the assets and manufacturing facilities of Nesher Pharma, reportedly for $60 million.

Nesher is the generic drug subsidiary of NYSE-listed KV Pharmaceuticals and has a $2.50-billion market in the US. The acquisition gave Zydus access to a "difficult-to-develop product pipeline, expertise and infrastructure that will add value to its operations in the US", said Pankaj Patel, chairman, Cadila Healthcare. In the past three years, Zydus has acquired smaller firms to expand its base in key markets.