Cipla India is to acquire a 25% stake in the manufacturing division of South Africa's third-largest pharmaceutical group, Cipla Medpro South Africa, it was announced yesterday.

Ciplo Medpro SA said it was cognisant of the need to increase volume in CMM, and was in the process of finalising an agreement with Cipla India regarding the acquisition, the consideration of which will be a "nominal value".

"Pursuant to this, Cipla India will provide additional volume and assist us in achieving World Health Organisation and Food and Drug Administration manufacturing approvals in the near future, resulting in increased orders and business for our factory.

"This will ensure better continuity and increased capacity utilisation and further entrench the relationship with Cipla India," the pharmaceutical group said.

It announced that during the past six months it has also initiated two new divisions, Cipla Consult (Pty) Limited and Cipla Nutrition (Pty) Limited.

"Although small in their start-up phase, these may lead to enhanced business benefits in the future," it said.

For the six months ended June, Ciplo Medpro SA reported a 56% increase in diluted headline earnings per share to 24.4c from 15.6c previously.

Profit for the period was up 59% to R108.7-million from R69.1-million for the six months to end June 2009 while basic earnings per share were up 58% to 24.6c from 15.6c the year before.

Group revenue was 29% higher at R714.3-million from R555.4-million.

The group said its business continues to grow and by June 2010 it was ranked the fourth-largest pharmaceutical company for the 12 months and third largest for the month of June 2010. Cipla Medpro has an EV of 112 (rands) and 109 (units) (IMS, June 2010).

"The total private pharmaceutical market grew by 10% in rands and 7% in units. Cipla Medpro's performance outstripped the market, growing by 24% in rands and 16% in units," the group said.

"We remain focused on growing our brands in both OTC and SEP products. Our top three SEP brands contributed to sales (12 months) of R170-million into the private sector and still have huge growth potential.

"Lexamil is performing at an EV of 140. Our top 10 OTC products all have EVs of more than 100, with Airmune tracking to do significant turnover in the next 12 months."