US firm Mylan buys out Stride Arcolab’s injectables unit
06 Dec 2013
Mylan Inc, a US-based generic drug specialist, and India's Strides Arcolab today separately announced that they had completed a deal, under which Mylan will acquire Arcolab's Agila Specialties division for a total consideration of up to $1.75 billion.
The Pennsylvania-based Mylan said the purchase of Agila Specialities will boost its presence in the high-growth injectable drugs market. It said there has been some restructuring of the deal since it was first announced in February.
"The acquisition of Agila will create a global injectables leader, expanding and strengthening Mylan's existing injectables platform and portfolio, and providing it entry into exciting, new geographic markets," Mylan chief executive Heather Bresch said in a statement.
The deal will make Mylan one of the top three global players in injectables, bringing the number of its manufacturing sites to 13 across six countries, the US firm said.
The size of the buyout had earlier been estimated at $1.6 billion, but Bangalore-based Strides said an extra $150 million was required due to acquisition costs and regulatory commitments, after it received a warning letter from the US Food and Drug Administration concerning another unit in Bangalore.
The deal now includes a "hold back" provision of $250 million of the total price, to be paid to Strides only if it fulfils some regulatory conditions.
Driven by patent expiries, the global generic injectable drugs market is expected to grow at an annual rate of 13 per cent, outpacing most other dosage forms, between 2011 and 2017, the US firm said.
In September, the US Federal Drug Agency had issued a warning letter to Agila Specialties over violation of manufacturing norms in one of its plants in Bangalore, following an inspection in June. Earlier, in the same month, the government had approved Mylan's deal to fully acquire Agila Specialties from Strides Arcolab. The companies had announced the deal in February.
While announcing the deal, the US-based firm had said that Agila will bring 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 FDA.
Commenting on the completion of the transaction, Strides Acrolab founder and chief executive Arun Kumar said, "We are delighted with the conclusion of this transaction and are confident that Agila will play a significant role in Mylan's growth strategy to become a global injectable leader.''
Following the deal, over 1,800 employees of the Strides group would become part of Mylan. Agila currently produces drugs across nine manufacturing facilities in India, Brazil and Poland, eight of which have been approved by the FDA.
