Ranbaxy Targets US Bradley Pharmaceuticals

Ranbaxy Laboratories seems to have joined the race to acquire US-based Bradley Pharmaceuticals to strengthen its presence in the lucrative US dermatology generics market. The source said that Ranbaxy has placed a preliminary non-binding bid with the Fairfield, New Jersey-based company. Given Bradley''s market capitalisation of just under $330 million, this could be one of the largest overseas acquisitions by an Indian pharma company, after Dr Reddy''s takeover last year of Germany''s betapharm for $570 million. Earlier reports have said Dr Reddy''s has also bid for the US firm. Bradley Pharma said last week it had received three non-binding offers, but did not disclose the identity of the potential buyers. Deutsche Bank Securities is advising Bradley on the potential sale. According to IMS Health, the US dermatology market stood at $10.65 billion in 2006, up 2% from 2005. A buyout of Bradley, either by Dr Reddy''s or by Ranbaxy, would help the Indian firm catch up with global consolidation in the generics market, an industry observer said. Bradley Pharma markets a range of branded and non-branded generic drugs in the US, along with a few recently in-licensed products. The company recorded net sales of $145 million in 2006, with a net profit of $9.7 million, representing a 21.5% increase over 2005. Its subsidiary Doak Dermatologics accounted for 76% of its revenues. Kenwood Therapeutics, which markets gastroenterology, gyneacology and respiratory drugs, and A. Aarons, its generics subsidiary, account 20% and 4% respectively of net sales.

Bradley, however, slipped to a net loss of $1.7 million and reported a 13% fall in net sales to $32.2 million for the second quarter ended June. According to a company press release, this loss was mainly due to a new returns and inventory optimisation plan, implemented in April and designed to reduce future product returns.