Aurobindo plans a foray into national formulation and sets a sales target of 1000 cr in the next 3 years

Aurobindo Pharma said it is actively evaluating entry into the domestic formulations business through a combination of acquisitions and organic launches.

The company said it will provide more clarity on its foray into domestic formulations in the first quarter of next year.

The company said it expects to have sales of Rs 1,000 crore over the next three years from the date of the first launch and is ready to allocate capital regardless of how much capital is needed.

Formulation portfolios and national brands are valued on average 3-4 times sales in recent mergers and acquisitions (M&A).

“We are prepared for it,” said P. V Ram Prasad Reddy, promoter and non-executive director of Aurobindo Pharma during the company’s earnings call on Thursday.

“We think we have the cash flow, we could get $200-300 million in incremental cash flow over the next 4-5 quarters, so that’s when we want to move either to the brand, either OTC, or maybe both,” Reddy said.

Reddy also said that branded formulation in India no longer requires thousands of reps (sales reps) to promote the products.

Aurobindo Pharma is largely an export-oriented drug manufacturer, while it has a business in India that is business-to-business (B2B) involving the sale of active pharmaceutical ingredients to other drug manufacturers.

Aurobindo has net cash of $211 million as of December 2021. The drugmaker is also in the process of restructuring its business, which involves spinning off the injectables business.

ET earlier this week announced that the company had shortlisted four blue-chip global investors – Blackstone Group, Advent International, CVC Capital and Baring Private Equity Asia – for a potential $1 billion investment in its injectables business unit. instead of a 20-30% pile.


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