Wednesday, January 12, 2005

Rumours Confirmed - Elder Pharma buys drug brand from Eli Lilly

The strong rumour reported by me a few days ago, that Mumbai-based Elder Pharma has bought the rights for an anti-infective drug, Tobraneg, from pharma multinational Eli Lilly India has been now confirmed through a formal announcement. Tobraneg, an injectable antibiotic brand of Tobramycin from Eli Lilly in India. The acquisition gives Elder ownership of Tobraneg for the Indian, Sri Lankan and Nepalese market. It is the first major brand sale deal in 2005 and the second product which Eli Lilly is selling in the recent months, the first being Dobutrex to Nicholas Piramal India late last year. The acquisition will help Elder Pharma to further consolidate its position in the anti-bacterial (anti-infective) segment. Tobramycin is an original research product by Eli Lilly and belongs to the Aminoglycoside class. Elder presently has cephalosporins (orals and injectables) with a total sale of Rs 20 crore from the segment, and the addition of an Aminoglycoside brand is expected to strengthen its product basket of woundcare anti-bacterials. Eli Lilly’s Tobraneg touched peak sales of Rs 5-crore sales last year. The drug enjoys brand equity among surgeons, gynaecologists, orthopaedics and consulting physicians. Tobraneg is prescribed as an add-on with cephalosporins in severe infections and surgical procedures. It competes with Aminoglycosides (prescribed for additional gram-negative bacterial cover and reduce chances of infections) molecules like Amikacin and Gentamicin. This segment has a total turnover of Rs 110 crore and unit-wise sales of more than Rs 8 crore annually. Some of Elder’s products include Chyrnoral, Salutyl and Oxoferrin. The exact price details of the acquisition deal have not been made public but the rumours are rife that Elder has paid about 1.25% times of the turnover of the brand, which was about Rs 5 crores in sales last year. Industry sources believe that apart from the expected increased income from the Tobraneg brand, Elder will also be able to extract mileage in the market place, which will push its brand equity to a new high because of an acquisition from an MNC's stable, that too, one like Eli Lilly.