Pharmaceutical Company Dr. Reddy’s Laboratories to Acquire Nimbus Health GmbH, A German Medical Cannabis Company
Dr. Reddy’s Laboratories Limited (BSE: 500124, NSE: DRREDDY, NYSE: RDY, NSEIFSC: DRREDDY, a leading multinational pharmaceutical company based in Hyderabad in India, announced the company’s entering into an agreement for acquiring Nimbus Health GmbH, the pharmaceutical wholesaler based in Frankfurt in Germany, which focuses on producing cannabis-based medical products.
The company will be acquired by Dr. Reddy’s by first making an advance payment, and then making milestone-based additional payments for the following four years, based upon the performance of the company. The transaction will close subject to the fulfillment of customary formalities.
Nimbus Health is a comparatively young company, having been established only in 2018, but is a pioneer in the field of medical cannabis. The purchase will help Dr. Reddy’s to make full use of the younger company’s strengths and produce cannabis-based medical products for patients who are in dire need of it. The brand name of the products will be Nimbus Health, and Nimbus’s stock will be fully owned by the new parent company.
About Nimbus Health GmbH
Nimbus is based in Frankfurt in Germany, and is a licensed wholesaler for cannabis products, having its own warehouses and sales teams to promote the sales of cannabis for patient needs. The company is focused on consistently producing high-quality cannabis products with increasing healing powers for helping patients.
About Dr. Reddy’s
Dr. Reddy’s is a multinational pharmaceutical company that is marketing a wide range of pharmaceutical products across the world. Besides medications, it manufactures diagnostic kits and biotechnology products.
The company focuses on many therapeutic areas like oncology, diabetology, cardiovascular diseases, gastrointestinal diseases, dermatology, and pain management. The company is based in India, and besides India, is highly active in many markets like Russia, the U.S., Europe, and also in countries belonging to the Commonwealth of Independent States.
About the Acquisition
Bundestag, or the lower house of the Federal Republic of Germany, had legalized medical cannabis use by 2017, and since then the demand has steadily increased for cannabis-based medicines, recording a compound annual growth rate of about 55% from then onwards.
From 2020 to 2021, the growth rate was 25%, and the medical cannabis market of the country is now valued at about €122 million. Overall, Germany in now one of Europe’s proliferating markets for medicinal cannabis products. About 150,000 patients in Germany are expected to benefit from these products.
Patrick Aghanian, who is the CEO of Dr. Reddy’s European Generics, explained the increased acceptance of cannabis for pain management, and ailments related to the central nervous system, in cases where other treatment options were not available.
He pointed out how cannabis was gaining importance as part of the future healthcare system, as more and more studies were being conducted in the field. Nimbus is a well-established and fast-growing company with good trading networks, and the cost of medical cannabis products is reimbursed through the government’s medical coverage in Germany.
As an increasing number of European countries are legalizing medical cannabis use, the market for it is also proportionately widening. Aghanian expressed satisfaction at the new partnership with Nimbus, with Alessandro Rossini and Linus Weber at the company’s helm, and how together they could all work towards increasing patient satisfaction with their products.
Linus M. Weber, M.D of Nimbus as well as its founder, and Dr. A. Rossoni, also M.D. as well as its co-founder, echoed the same sentiments as Aghanian. The former said that the company’s team was excited that Dr. Reddy’s understood the strengths of Nimbus and made the offer of acquisition and that they were happy that both the companies shared the same values.
He looked forward to the synergies created by working together with the new company in every sector. The latter too said that the affiliation between the two companies had developed well during the previous year and that the company was happy that Dr. Reddy’s recognized the potential of Nimbus.
He said that his company was quite confident of the growth opportunities for the future that the new partnership would generate in the fast-growing market for cannabis-based medicines.