Shilpa Medicare to acquire two pharmaceutical-based entities

Shilpa Medicare Limited is all set to acquire FTF Pharma Private Limited through share purchase agreement (SPA). As per the terms of draft share purchase agreement, the acquisition would be completed on or before April 30, 2023. The objective of Shilpa Medicare behind this acquisition is to enhance its research and development (R&D) facilities as well as to enhance its product extension.

Hundred per cent stake would be acquired for gross sale consideration of Rs 75 crore, which is equivalent to enterprise valuation. If any governmental or regulatory approvals are required, the company will undertake it in the due time.

FTF Pharma is engaged in the R&D of generics, super generics 505(b) (2) route or value added generic drugs (incremental innovation) and speciality generics. It independently develops the molecule up to a certain stage, patent it and then out-licenses it to an MNC partner for further development and also, to file NDA/ANDA application targeted for USA, EU, Canada, ANZ and ROW markets. It also provides integrated drug development services to Indian, Canadian, European, American and MNC companies.

In order to develop pharmaceutical finished dosage forms, FTF has established a state of the art, modern R&D facility, in over four acres of land in Ahmedabad with 40,000 sq ft of R&D space spread over four floors and has a capacity to expand it further. FTF Pharma was incorporated on June 20, 2012 and for FY19, its turnover stood at Rs 22.09 crore.

Shilpa Medicare will also acquire Auxilla Pharmaceuticals and Research LLP, which was incorporated on May 14, 2020. Forty per cent stake will be acquired by investing Rs 60 crore. Auxilla Pharma is mainly into reformulation/repurposing/novel drug delivery system of existing dosage forms and active pharmaceutical ingredients (APIs).

On Tuesday, the stock of Shilpa Medicare opened at Rs 572. During the day, it slipped 8.8 per cent making an intraday low of Rs 514 from its previous close of Rs 563.90 on BSE. Later, it got closed at Rs 527.