Cipla shares gain on acquisition of 2 US generic firms for $550 million

At 11.34 am, the share price of Cipla was trading around 1 per cent higher at Rs 663.05. (Photo: PTI)

Cipla shares jumped as much as 3.45 per cent intraday on Friday after the company announced that its UK-based subsidiary, Cipla EU has entered into definitive agreements to acquire two US-based companies, InvaGen Pharmaceuticals and Exelan Pharmaceuticals for a total of $550 million to be paid in cash.

At 11.34 am, the share price of Cipla was trading around 1 per cent higher at Rs 663.05. It opened at Rs 673.20 and touched a high and low of Rs 679.50 and Rs 654.25, respectively, in trade so far. Sensex was down around 2 per cent at 25,271.

This acquisition, which is the second landmark acquisition in Cipla’s 80 years of history, will give the company scale in the US generics market through a wide range of product portfolio in CNS, CVS, anti-infectives, diabetes as well as other value added generics.

The acquisition of InvaGen pharmaceuticals provides Cipla with about 40 approved ANDAs, 32 marketed products, and 30 pipeline products which are expected to be approved over the next 4 years.

The acquisition of Exelan Pharmaceuticals provides Cipla access to the government and institutional market in the US through Exelan’s deep expertise, engagement and experienced management team in the business.

For the quarter ended June 2015, the company reported a consolidated net profit of Rs 650.61 crore, up 120.86 per cent, against Rs 294.58 crore in the corresponding quarter a year ago.