As a result, some of the therapy areas it had bought included neurology, women health care, pain-analgesics, cardiovascular and anti-diabetic portfolios.
It has been able to move key products from Kinedex and UTH to its flagship Eris Lifesciences division. However, the neuro portfolio of Strides has performed less than the industry. According to data from AIOCD-AWACS, the market research wing of the All India Organisation of Chemists and Druggists, Linedex and UTH fell 33 per cent in moving annual turnover (MAT) value for February 2019, as against February 2018,
The Eris Lifesciences division grew 11.4 per cent to post a MAT of Rs 912 crore in February. Strides grew 3.6 per cent to Rs 199.6 crore. Kinedex and UTH fell 33.3 per cent and 33.6 per cent, respectively, to Rs 46.8 crore and Rs 29.2 crore.
Contrary to analyst expectations, CNS as an industry segment had decelerated from 25-30 per cent growth to 10-13 per cent. Eris has also seen its Strides division post single-digit growth in February.
“CNS growth has come down drastically in the past two-three months, from 25-30 per cent at some point of time earlier. With Eris just stepping into the segment, one can't expect them to immediately do better. Rather, one needs to give Eris at least two years to get some foothold. Plus, the product Eris received from Strides is smaller in terms of market size,” Surajit Pal, research analyst at brokerage Prabhudas Lilladher, told Business Standard.
As for the fall in Kinedex and UTH, analysts reckon it might not be so detrimental to Eris, as it had moved key products from these acquired divisions to its flagship one. An e-mailed query to Eris Lifesciences remained unanswered.
“Eris has already shifted key products from Kinedex and UTH. The point of acquiring them was to synergise their portfolio in the orthopaedic and women's healthcare segments, where they want to create a completely new portfolio. Kinedex and UTH are not supposed to give them huge growth. Given that their contribution in the overall scheme of things is less, their pressure on Eris’ margins is also low,” Pal said.
Kinedex also fell in the December quarter by almost 30 per cent; for the first nine months of this financial year, it fell 18 per cent. Amit Bakshi, chairman of Eris, had earlier said the acquisition would take another quarter to see growth on expected lines.
“Kinedex specifically for this quarter has not done well and we had more of some inventory issues. That is how there was some realignment in the portfolio and there were some products which we had to readjust with FSSAI (regulator) guidelines. In the coming quarter, this will do well,” Bakshi had said.
The anti-diabetic and cardiac portfolio bettered industry growth at 15.9 per cent in February; the latter grew 12.7 per cent. At 7.3 per cent growth in MAT value for February 2019 over February 2018, the neuro/CNS portfolio grew lower than the industry average of 10.2 per cent.
Eris’ third largest portfolio, of vitamins/mineral/nutrients, fell 0.16 per cent as against industry growth of 9.2 per cent. Its gastrointestinal and gynaecological segments fell nearly 1.9 and 6.9 per cent, as against the industry average of 9.1 per cent and 8.5 per cent, respectively.
Pal attributed the numbers to overall slowdown in growth. Adding: “Generally, these guys disclose primary sales and not secondary sales to retailers and distributors. So, there would be some lag in the (full) data.”