Mumbai, Sep 2 (IANS): Shares of Morepen Laboratories surged nearly 11 per cent on Thursday after the company announced to transfer its medical devices business to a wholly owned subsidiary.

During the initial trade, its shares hit an intraday high of Rs 56.95 per share.

Around 12.55 p.m., shares of the company on the BSE surged Rs 55.00, higher by Rs 3.65 or 7.11 per cent from its previous close.

In a statement, the company said that it plans to carve out the business into a separate wholly owned subsidiary both for building teams to manage scale of operations of large and fast-growing business and unique features of point-of-care (POC) business.

Given the scale the company is looking to achieve in this point of care Medical Devices business, it also plans to bring in fresh capital that makes it imperative to have a separate subsidiary to undertake this fast-expanding POC business.

The nature of said POC Medical Devices business, management, sales and marketing strategies are different from that of the typical API and pharma business of the company. The proposed segregation will give clarity to the working teams, trade customers and other stakeholders.

Post this spin-off, the company will be able to put its entire focus on its core business of active pharmaceutical ingredients (API) and formulations. The company has two USFDA plants of API and is exporting the drugs to over 80 countries and that is highly specialised and technical business and needs more expertise and skills in that area.

On the other hand, the medical devices business is more focused on digital and biological sciences and requires more marketing efforts to increase the reach and penetration in the Indian market, the statement said.