Dr. Reddy’s Acquires Haleon’s Nicotine Replacement Therapy Brand for £500 Million

Dr. Reddy’s Laboratories Ltd is a leading India-based pharmaceutical company that offers a portfolio of products and services, including Active Pharmaceutical Ingredients (APIs), Custom Pharmaceutical services (CPS), generics, biosimilars, and differentiated formulations.

Dr. Reddy’s Acquisition agreement details 

Dr. Reddy’s Laboratories Ltd announced on June 26 that its subsidiary, Dr. Reddy’s Laboratories SA, has signed a definitive agreement with Haleon plc and its associate companies to acquire the global portfolio of consumer healthcare brands in the Nicotine Replacement Therapy (NRT) category, excluding the United States. Nicotine replacement therapy is a medically approved way to treat people with tobacco use disorder, by taking nicotine through means other than tobacco. NRT is recommended by the ‘World Health Organization Model List of Essential Medicines’ for nicotine use disorders

This acquisition includes purchasing shares of Northstar Switzerland SARL, a Haleon group company. Dr. Reddy will acquire the share capital of Northstar Switzerland SARL for a total consideration of GBP 500 million, with an upfront cash payment of GBP 458 million and performance-based contingent payments of up to GBP 42 million, payable in 2025 and 2026.

Brand Portfolio and Market Presence

The portfolio being acquired includes Nicotinell, a prominent global brand in the NRT category. Nicotinell has a significant presence in 31 countries, spanning Europe, Asia (including Japan), and Latin America. Notably, Nicotinell is the second-largest NRT brand globally, excluding the United States. It holds the first or second position in 14 of the top 17 global markets, highlighting its strong market penetration and consumer trust. In particular, the lozenge/mini lozenge format of Nicotinell holds the top position globally, further solidifying its market leadership.

The Top 12 countries where its products are sold are the UK, France, Sweden, Denmark,Finland, Norway, Australia, New Zealand, Canada, Japan, Germany, and the Netherlands. These countries amounted to 80% of the revenue of CY 23.

The financial impact of this deal

Nicotinell ranks among the top 15 biggest brands among all over-the-counter (OTC) brands in Europe, excluding Russia and Italy. It also ranks 32 among all OTC global brands, excluding the US. In the calendar year 2023, the portfolio generated approximately GBP 217 million in revenue, demonstrating its substantial market impact and financial performance. This acquisition is expected to significantly strengthen Dr. Reddy’s position in the consumer healthcare market, particularly in the NRT segment.

Conclusion: The acquisition of Haleon’s NRT portfolio marks a strategic milestone for Dr. Reddy’s Laboratories. By integrating Nicotinell into its existing portfolio, Dr. Reddy aims to leverage the established market presence and brand equity of Nicotinell. The stock of Dr. Reddy currently trades up by 2.12% from its previous day’s closing price. At Rs.6,200 a piece.  

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