In a bid to expand the presence in the generics markets of the US, pharma major lupin will buy US-based Gavis Pharmaceuticals for Rs 5,610 crore ($880 million). The acquisition is believed to be the largest one by an Indian pharma firm in the US.
“The company has entered into a definitive agreement to acquire privately held Gavis Pharmaceuticals llC and Novel laboratories Inc (GAVIS), subject to certain closing conditions, in a transaction valued at $880 million, cash-free and debt-free”, lupin said in a statement.
“The transaction has been unanimously approved by the boards of directors of lupin and Gavis,” it added.
However, lupin’s Chief Executive Officer Vinita Gupta said, “This is a pivotal acquisition for lupin as it aligns with our goal to expand and deepen our US presence. We are confident that lupin’s proven commercialisation capabilities, vertically integrated manufacturing operations and supply chain strengths will accelerate Gavis’s growth.”
The acquisition will help lupin increase presence in the US, its largest market where sales fell 31 per cent to $180 million in the first quarter. lupin said the acquisition - largest by an Indian pharma firm in the US -of closely held Gavis will give it access to 66 generic drugs as well as broaden its ‘pipeline in dermatology, controlled substance products and other high- value and niche generics’.
Gavis will contribute to lupin’s earnings in the first full year after purchase. lupin shares dropped the most in three months on the BSE after missing earning estimates for the April-June quarter. Shares closed 5.3 per cent lower at Rs 1,728.25.
Gavis brings a highly-skilled US based R&D organisation which would complement lupin’s Coral Springs, Florida, inhalation R&D centre.
Gavis’s New Jersey-based manufacturing facility will become lupin’s first manufacturing site in the US, according to the statement said.
“This is a time of globalisation for the specialty pharmaceutical industry. I am confident that the combined entity will be a powerhouse in the US specialty space and will significantly enhance lupin’s US platform,” Gavis Founder and CEO Veerappan Subramanian said.
New Jersey-based Gavis is a privately-held company specialising in formulation development, manufacturing, packaging, sales, marketing, and distribution of pharmaceuticals products.
Meanwhile, shares of lupin on Thursday tumbled over 5 per cent after the company reported a 15.96 per cent dip in consolidated Net profit for the quarter ended June, 2015. The stock dipped 5.23 per cent to Rs 1,728.60 on the BSE. During the day, it lost 5.92 per cent to Rs 1,716. #END#