Strides Arcolab sells Agila Specialties to Mylan for $1.6 bn

US generic and specialty pharmaceutical company Mylan Inc, yesterday said that it would buy the injectable drugs unit of Bangalore-based Strides Arcolab Ltd for $1.6 billion (Rs8,659 crore) in cash order to expand its presence in the fast-growing generic injectables market.

The deal comes seven years after Mylan paid $736 million (Rs 3,424 crore) in cash to buy Hyderabad-based Matrix Laboratories, a leading producer of active pharmaceutical ingredients (See: APIs) for generic drugs (see: Mylan Labs to acquire Matrix Labs for $736 million).

The Pennsylvania--based company will acquire Agila Specialties Private Ltd, a developer, manufacturer and marketer of high-quality generic injectable products for $1.6 billion and $250 million (RS1,353 crore) in potential milestone payments.

The deal comes after Pfizer, the world's largest drugmaker, was last month weighing a plan to buy Agila Specialties, and was reported to have done due diligence.

Agila, which makes penicillin, oncology drugs, and sterile injectables, had also drawn interest from Swiss drugmaker Novartis, and Germany's Fresenius SE.

Agila Specialties (formerly Strides Specialties), was spun off as a separate division following a restructuring in 2009, and functions as a wholly-owned subsidiary of Strides Arcolab.

It focuses on key therapeutic areas like anti-infectives, oncology, CNS, GI, ophthalmics and peptides.

The acquisition will give Mylan a broad product portfolio of more than 300 filings approved globally and marketed through a network covering 70 countries, including 61 abbreviated new drug applications (ANDAs) approved by the US Food and Drug Administration (FDA).

It will also allow Mylan to expand its geographic footprint into key growth markets, such as Brazil.

Agila also has a global pipeline of approximately 350 filings pending approval, including 122 ANDAs pending FDA approval.

The company currently produces products across nine high-quality manufacturing facilities in India, Brazil and Poland, eight of which have been approved by the FDA.

Agila's manufacturing capabilities include vials, pre-filled syringes, ampoules, lyophilization, cytotoxics, and antibiotics. Agila's manufacturing base represents one of the largest steriles capacity in India and one of the largest lyophilization capacities in the world.

In addition to its established presence in developed markets, Agila has a strong position in high-growth emerging markets, including Brazil.

Agila Specialties accounted for 74 per cent of Strides's earnings before interest, taxes, depreciation and amortisation in the nine months through September 2012, while sales jumped to Rs10,000 crore in the same period, from Rs7,400 crore a year earlier.

Mylan said that Agila's capabilities complement its existing injectables platform of more than 500 products marketed globally, including 55 ANDAs, and its high quality sterile manufacturing facilities in Ireland and India.

It said that the global generic injectables market is expected to grow at a compound annual growth rate of 13 per cent from 2011-2017 driven by patent expiries, outpacing most other dosage forms.

The combined Mylan-Agila portfolio will represent approximately 70 per cent of regulated market demand for injectables and the combined R&D platform and manufacturing capabilities will position Mylan to be a significant participant in advanced new technologies to drive future growth.

Mylan CEO, Heather Bresch, said, "The addition of Agila to our existing injectables platform will immediately create a new, powerful global leader in this fast-growing, attractive market segment and accelerate our target of becoming a top-three global player in injectables.''

"By combining Agila's strong injectables capabilities with Mylan's powerful global engine, we will catapult our injectables business to a new level. Agila will bring Mylan one of the deepest and broadest global injectables portfolios in the industry, and together we will have more than 700 marketed injectables products and a global pipeline of more than 350 injectables products pending approval,'' said Rajiv Malik, president of Mylan.

Mylan is one of the world's leading generics and specialty pharmaceutical companies and sells its products in approximately 150 countries.

It has a portfolio of more than 1,100 generic pharmaceuticals and several brand medications. It also offers a wide range of antiretroviral therapies, and is one of the largest active pharmaceutical ingredient manufacturers.

The New York Exchange-listed company has a market cap of $11.6 billion and posted net profit of $536 million in 2012 on revenues of $6.1 billion.