With a view to enhance its presence in the world’s largest generics market, Cipla on Friday said it would acquire 100 per cent of generic businesses of two pharmaceutical companies in the US for $550 million in a cash deal. The targets are the privately-held InvaGen Pharmaceuticals and Exelan Pharmaceuticals, which are subsidiaries of the US-based Hetero Pharma. This would be the company’s second-biggest acquisition in its 80-year history. About two years ago it had bought South Africa’s Medpro.
Cipla, the country’s fourth largest drugmaker by sales, will as a result of these acquisitions gain multiple products in the areas of anti-infectives, diabetes and central nervous system disorders. They also give it access to the government and institutional market in the US. In fact, Cipla has been late in entering the US market and building a sizeable presence there as most of its peers have already entered this market. In July, Lupin, the country’s third largest drugmaker by sales, bought Gavis Pharma for $880 million to revive its growth in the US market.
Though the trend among Indian drugmakers is to move away from oral products to injectables and other complex generics as they provide higher margins, the deal brings advantages to Cipla. For instance, the acquisition of InvaGen provides the firm its first R&D and manufacturing base in Hauppauge, New York, and a skilled US-based R&D organisation. FE