Booster dose

Mumbai, Jan. 28: Novartis India Ltd is selling a bulk drug business and its Mahad facility to Sandoz Pvt Ltd for Rs 30.77 crore.

Novartis is selling its rifampicin bulk drug business to meet operational challenges posed by surplus capacities, cheaper imports and falling domestic prices, the company said.

?This has been a cause of concern for the company and after closely monitoring developments in the anti-TB market, the board decided to propose the sale of the rifampicin bulk drug business together with its Mahad facility to Sandoz Pvt Ltd,? a company statement said.

The deal price has been determined on the basis of a valuation report by chartered accountants Bansi S. Mehta & Co.

The consideration, it said, will be suitably adjusted to represent any change in the net asset value on the date of transaction.

According to the company, the sale will be effective April 1 or any date thereafter.

This announcement came amid a disappointing performance by the company during the quarter ended December 31.

Net profit declined 55 per cent to Rs 21.8 crore from Rs 48.81 crore in the corresponding period last year. Net sales also came down to Rs 135.16 crore from Rs 145.32 crore last year.

For the nine-month period, net profit was lower at Rs 64.7 crore against Rs 92.9 crore in the year-ago period. Sales were lower by 2.5 per cent at Rs 392.4 crore. While there was a higher tax provision, effective tax rates are not comparable as the prior period profits include significant income from sale of property attracting lower tax rate.

The pharmaceuticals, generics and animal health businesses saw lower revenues with the OTC being the sole exception. The pharma business, with sales of Rs 243 crore, registered a decline of 1.7 per cent. The generics business also continued to underperform and sales at Rs 81.1 crore saw a drop of 2.3 per cent.

While the OTC business grew by 10.3 per cent with sales of Rs 44.1 crore, the animal health segment recorded sales of Rs 24.2 crore with a sharp reduction of 25.3 per cent due to discontinuation of a compound, which the group has phased out.