Dr. Reddy's Acquisition of UCB Brands

Abstract

The case is set in the Indian pharmaceutical space as of April 2020, and offers a context to assess the acquisition of certain UCB brands by Dr. Reddy’s Laboratories (DRL). The industry was broadly divided into two segments – bulk drugs and formulations. Generic drugs were allowed for sale after the expiry of the patent of the original drugs. The Indian pharmaceutical industry was the largest provider of generic drugs globally. In 2014, DRL acquired certain UCB brands for about INR 800 crores. This acquisition was expected to accelerate DRL’s presence in the high growth areas of dermatology, respiratory, and paediatrics market, with brands such as Atarax, Nootropil, Zyrtec, Xyzal, and Xyzal M. The case ends with a leading question: What is the extent to which the acquisition was successful in its ability to unlock the value assumptions that went into paying a whopping INR 800 crores.