Some media reports suggest that Lupin has bought a drug called Antra from Ocient Pharma of US for around USD 35. Lupin bought this brand at around 0.5x sales because Ocient Pharma is under bankruptcy. Just to give a perspective Ocient it bought this same brand around 2 years ago at 2x sales. We believe this acquisition is EPS accretive for Lupin as one it has bought this brand at relatively cheaper price & secondly it can leverage its already existing sales force in US. Lupin will have to employ additional 100 people in its sales force for this product but this will surely strengthen its [position regulated mkts. Our rough cut estimates suggest incremental earnings of around Rs 3-4 per share for Lupin from this acquisition which roughly translates into an increase of Rs 45-50 in the stock price. Please note that till the time of writing this article this news has not been formally announced in Indian press by the company but we expect the formal announcement very soon.
Our sources also suggest there may be a few more announcements by the company in next couple of months on acquisitions in countries like Brazil, Japan & China. Hence we expect the stock price to remain buoyant.
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