India’s leading pharma company announced that it has signed an agreement to acquire US units of Novartis owned Sandoz Inc. for $900 million, which will make the Indian pharma giant the second largest genetic player in the US ahead of major genetic drug companies including Mylan, Lupin, and Taro.
Govindarajan, Managing Director of Aurobindo Pharma said, “The acquisition is in line with the company’s strategy to grow and diversify the business in the US.” Further, he added, “Acquiring these businesses from Sandoz will allow us to further expand our product offering and to become a leading player in the generic dermatology market. We will be focused on leveraging our group’s market-leading, vertically integrated and highly efficient manufacturing base to enhance the market position and medium-term profitability of the businesses we are acquiring.”
The deal between Aurobindo Pharma and Sandoz is the largest outbound pharma deal by an Indian company. The acquisition comprises Sandoz’s dermatology business and portfolio of oral solid products, which generated $1.2 billion in sales in December 2017 and about $600 million in the first half of 2018. The deal will enable Aurobindo to access authorized generics and in-licensing products, branded dermatology products of Sandoz Inc’s three manufacturing facilities consisting Hicksville, Melville, and Wilson. Likewise, Aurobindo will have 100 percent shareholding in Eon Labs, which was wholly-owned by Sandoz.
Aurobindo Pharma hit 52-week highs on Indian Stock Market
Just after Aurobindo Pharma announced the acquisition of Sandoz’s generic business in the US for $900 million, Aurobindo Pharma was up 9% at INR 826, surging 22% in the past three trading days. Currently, its US business contributes to around 45% of its revenue.
Covering the large portfolio of topical antibiotics, gynecological and dermatological antifungal agents, anti-acne agents, local anesthetic analgesics, and dermatological chemotherapeutic agent, Aurobindo Pharma’s revenues were nearly INR 16,500 crore ($165 billion) with the profits of INR 2,440 crore ($24.4 billion). Analysts’ also observed a consistent scale-up in the US despite broader pricing pressure.