Marksans stock zooms 12% after news of Tevapharm facility buy

The news that Marksans Pharma is set to acquire a bulk pharmaceutical formulations facility from Tevapharm has set the former’s shares rallying as much as 12 per cent during early trade on Wednesday.

In a regulatory filing, the drug firm has mentioned its pact with Tevapharm India to acquire the latter’s Goa-based bulk pharmaceutical formulations business.

“The company has entered into a business transfer agreement with Tevapharm to acquire its business relating to the manufacture and supply of bulk pharmaceutical formulations as a going concern on a slump- sale basis,” the filing added.

Following the update, shares of Marksans Pharma surged 12 per cent to Rs 52.25 on Wednesday, before trading at Rs 50.40 at 10.20 am. The scrip had settled at Rs 46.64 on Tuesday.

The drug firm has agreed to retain employees of the unit and adhere to the existing terms of employment. The transaction is in cash consideration and is expected to be finalised by April 1, 2023, subject to the closing conditions. But the deal value has not been specified.

Teva’s affiliate Watson Pharma will continue to own and operate Tevapharm’s other manufacturing site at Verna in Goa, the drug firm added. Marksans will continue to supply Teva's affiliates with certain products till FY23-end.

Despite the rally, Marksans Pharma shares have dropped 10 per cent in the last one month, whereas the stock has tumbled 25 per cent so far in 2022.

With the acquisition, Marksans plans to double the existing domestic capacity and manufacture tablets, hard- and soft-gel capsules, ointments, gummies and creams from the new capacity.