Morepen Labs transfers medical devices biz into subsidiary
Shares of Morepen Laboratories surged 11% Thursday the drug maker decided to transfer its medical devices business to a subsidiary.
Through this decision Morepen aims at building teams to manage the scale of operations of large and fast-growing businesses and unique features of POC business. It also plans to bring in fresh capital that makes it imperative to have a separate subsidiary to undertake this fast-expanding POC business.
The proposed segregation will give clarity to the working teams, trade customers and other stakeholders. Post this spin-off, the company will be able to put the entire focus on its core business of active pharmaceutical ingredients (API) and formulations.
After hiving off medical devices business into a wholly-owned subsidiary company, separate dedicated management will work for the development of Medical Devices Business in a separate independent entity. In the second phase post hive off, the medical devices company would go for CE Certification of its manufacturing facilities to become the hub for PoC manufacturing in India. The new entity plans to deploy more resources on the R&D, backwards integration of core technologies like making enzymes /proteins and develop a data lab for connected devices.
The revenue and profit derived from the subsidiary will be consolidated with Morepen.
The pharmaceutical business contributes Rs 834.91 crore or 74.27% of revenue whereas it derives Rs 289.29 crore or 25.7% revenue from medical device segment.
Morepen intends to complete the biz transfer in the current fiscal year.
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