Lupin to transfer OTC consumer healthcare business to wholly owned subsidiary for ₹550-650 crore

Drugmaker Lupin is transferring its over the counter (OTC) consumer healthcare business to a wholly owned subsidiary for ₹550-650 crore, the company said, after it announced its financial performance for the third quarter (Q3),

The company’s profit after tax stood at ₹858 crore for the period under review, up 38.8 percent from the same period last year. It clocked sales of ₹5,618 crore, up 10.6 percent from ₹5,079 crore in the same period last year.

Nilesh Gupta, Lupin Managing Director, said “Our third quarter results highlight our continued strength, with both revenue and EBITDA showing sustained growth. US revenues led by building scale in new products have been pivotal for our growth, supported by a strong nine-month performance from our India and EMEA regions.”

Giving details on the OTC business transfer, Lupin said, it was transferring this business, on a slump sale basis, to a wholly owned subsidiary that is proposed to be incorporated, for ₹550 to ₹650 crore. The consideration expected is subject to movement in working capital and other items in the intervening period up to completion and post-completion adjustments, if any, it added.

Explaining the rationale, it added, “Separating OTC Business as an independent entity positions the company to thrive in the rapidly growing OTC market while allowing it to sharpen its focus on core strengths in prescription drugs.”

Revenue of the OTC consumer healthcare business for FY24 for brands proposed to be hived off was about ₹148 crore, or about 1 percent of the turnover of the company on a standalone basis for FY24 (₹14,666 crore), Lupin said.

A Business Transfer Agreement (BTA) between the company and new subsidiary is expected to be implemented by April 30, 2025, or as mutually agreed, it said, and the transaction was expected to be completed by June 30, 2025, it added.  

Reappointments

Lupin announced a couple of reappointments too, cleared by its board, including of Vinita Gupta, as a Whole Time Director, and Chief Executive Officer, for five years starting May 28, 2025. Ramesh Swaminathan, a Whole Time Director designated as Executive Director, Global Chief Financial Officer and Head of API Plus SBU, was also reappointed for five years starting March 26, 2025. The company also announced the formulation, adoption and implementation of Lupin Employees Stock Option Scheme 2025 for grant of the same to employees

Q3 performance

On its financial performance, Lupin said, its North America sales for the quarter under review was ₹2,121 crore, up 12.3 per cent; accounting for 38 per cent of Lupin’s global sales. It’s Q3 FY2025 sales were $235 million compared to $212 million in the same period last year.

It received six abbreviated new drug approvals (ANDA) in the US and launched two products in the quarter. It has 163 generics products in this market.

Its India formulation sales for Q3 FY2025 sales were ₹1,930 crore, up 12 percent from the same period last year. It accounts for 34 per cent of Lupin’s global sales. The company launched 11 brands across Diabetes, Cardiac, GI, Derma, CNS, Gynae and Opthal therapies in the last nine months.

Sales in the EMEA (Europe, Middle East, and Africa (EMEA) region stood at ₹624 crore, up 21 per cent; and accounting for 11 per cent of Lupin’s global sales. Its sales for the emerging markets region (APAC and LATAM) stood at ₹450 crore, down 4.7 per cent compared, and accounting for 8 per cent of Lupin’s global sales.

Lupin’s API (Active pharmaceutical ingredient) sales in the period, stood at ₹289 crore, up 4 per cent; accounting for 5 per cent of Lupin’s global sales. And its research and development investment stood at ₹434 crore, (7.7 per cent of sales) for the quarter compared to ₹356 crore (7.0 percent of sales) for Q3 FY2024, the company said.