Shares of Eris Lifesciences fell 2% in intraday trade on Friday, touching a two-year low of Rs 570. The stock fell 4% two days after the company acquired nine dermatology brands from Dr Reddy’s Laboratories for Rs 275 crore. The stock was quoted at its lowest level since March 2021.

Management said the deal would help increase and expand the company’s cosmetic dermatology business through product offerings.

In January, Eris also bought some genuine leather brands from Glenmark Pharma. Eris Oaknet Healthcare, a wholly-owned subsidiary of Eris Lifesciences, has acquired the tail-end brands of its skin division in India and Nepal from Glenmark for Rs 340 crore. The portfolio has an annual revenue base of around Rs 85 crore.

Eris has underperformed the market over the past month, with shares down 11% compared with a 5% drop in the S&P BSE Sensex. Meanwhile, it has lost 20% over the past six months, compared with a 1.6% decline in the benchmark index.

Meanwhile, Dr Reddy announced in an exchange document the signing of an agreement to divest certain of the company’s non-core brands in dermatology to Eris Lifesciences.

“Under the agreement, Eris Lifesciences will be allocated the trademarks of these brands by Dr Reddy’s for a consideration of Rs 275 crore. The divested portfolio will have sales in India of Rs 60 crore as per IQVIA MAT December 2022,” the company said.

Analysts at ICICI Securities believe the deal aligns with industry metrics and will not have any material impact on Dr Reddy’s post-divestment revenue (<1% of sales in FY23).

Shares of Dr Reddy rose 2% to Rs 4,469 on the BSE in intraday trade today.