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ICICI Securities Report
Novartis AG has entered into agreements with Dr.Reddy’s Laboratories Ltd. and JB Chemicals and Pharmaceuticals Ltd. for their cardiovascular combination of Valsartan and Sacubitril in India.
The patented molecule has been growing at ~38% compound annual growth rate over FY19-21 and is one of the fastest growing molecules in the cardiology segment.
While Dr. Reddy's has acquired the Cidmus brand (currently marketed by Lupin Ltd.) for a cash consideration of $61 million, Azmarda (currently marketed by Cipla Ltd.) has been acquired by JB Chemicals for a cash consideration of ~32.5 million.
Both the transactions appear reasonably valued at ~3.2-3.5 times moving annual total February 2022 sales, however, patent for the drugs expire within the next 12 months which could erode the product value substantially.
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