Lupin settles Gavis/Novel dispute on a friendly note

Lupin has officially announced that the dispute with the sellers of Gavis Pharmaceuticals and Novel Laboratories regarding the breaching of the terms of purchase & sales agreement of the definitive agreement entered in 2015 by the company has now been resolved on a friendly note.

Lupin is a well-known company in the pharmaceutical sector, which strives to make affordable medicines of superior quality and available to places where medical needs are unmet.

In 2015, Lupin entered into a definitive agreement with Gavis Pharmaceuticals LLC and Novel Laboratories Inc in order to expand Lupin’s scale in the US market and also for some advancement in dermatology, controlled substance products, and also other generics. Gavis brings in a highly-skilled R&D organisation that would help in the growth of Lupin’s R&D centre in Florida.

According to the purchase & sales agreement, the purchased funds were to be held in the escrow account and were to be released on certain dates after the closing of the transaction. As per the sellers of Gavis/Novel, Lupin breached the terms of the agreement by withdrawing amounts that exceeded the escrow account for untimely claims of indemnification, which in turn, posed the sellers to shortage of available funds from the sale price at their discretion. This complaint was countered by Lupin saying that the sellers were involved in selling the products outside their ordinary course of business through a fraudulent scheme in order to boost their sales figures and meet the financial estimates shown to Lupin before the sale agreement and also were liable for the breach of representations and warranties in the purchase & sale agreement.

On Wednesday, Lupin’s share closed at Rs 960.55. It was up by 1.74 per cent as compared to its previous close. It was quite close to the intraday high of Rs 963.80 as well as its 52-week high of Rs 1,121.85 on BSE.