Vivimed Labs announces investment by OrbiMed Asia in its API business, UQUIFA

Vivimed Labs Limited ("Vivimed" or the company), a Pharmaceuticals and Specialty Chemicals company, has signed definitive agreements to facilitate an investment of USD 42.5mn by OrbiMed Asia into the Company's subsidiary, Vivimed Labs Mascarene Ltd, the holding entity of the company's ApI business, UQUIFA.

The proceeds of this fund raise will be utilised by the Company primarily for,

- Debt reduction and optimisation of capital structure at the parent entity level

- Investment in the API business for capacity augmentation and organic growth

UQUIFA contributes approximately 60% of the company's total consolidated revenues and a higher proportion of the reported EBITDA. The business, since its acqulsition by the Company, in 2011 has seen meaningful improvement in its profitability and product pipeline. The growth in the business has been driven by a ramp up in CDMO business, better product mix and higher market shares in the generics portfolio. The segment EBITDA margins have expanded to be in the range of 17-18%, from high single digit levels at the time of acquisition.

UQUIFA will pursue strategies aimed at delivering higher growth and further improvements in margin profile, in the coming years.

Commenting on the development, Mr, Santosh Varalwar, Managing Director said: "Vivimed welcomes the investment by OrbiMed in our business as we prepare ourselves to embark on the next lap of growth for our API franchise. UQUIFA, today, is a significant part of vivimed,s presence in the pharmaceuticals business and is poised to grow well ahead of the industry on the back of our strategic initiatives and investments committed. Even as we have seen a scale up in the sales and profitability metrics from this part of the business in the recent past, we are confident that high value opportunities in our targeted segments of the market will drive the future.

Mr Saurabh SG, Executive Director, added, the proceeds of this investment will be utilised to drive, business growth and, increase the Company's profitability by optimising the capital structure turther.

At UQUIFA, we have a well-diversified portfolio across the generic segment and, our presence in the niche CDMO space where we work with the innovator companies. We would like to use this platform to build a high-value franchise with access to growth opportunities across both the segments, with a constant focus on compliance and quality. Our leadership teams are excited as we look to grow sales and profitability across all our Business Verticals, which will be a source of significant shareholder value, as we move ahead in our chosen markets.

Shares of VIVIMED LABS LTD. was last trading in BSE at Rs.137.6 as compared to the previous close of Rs. 137.25. The total number of shares traded during the day was 707030 in over 4967 trades.

The stock hit an intraday high of Rs. 143 and intraday low of 130.2. The net turnover during the day was Rs. 98022160.

Source : Equity Bulls

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