DSIJ Mindshare

Cipla acquires 100 per cent stake in generic businesses of two US companies

Cipla entered into definitive agreements to acquire two US-based companies, InvaGen Pharmaceuticals and Exelan Pharmaceuticals. The transaction being subject to certain closing conditions, is valued at USD 550 million. This is the second landmark acquisition by the Cipla in its 80 years of history. This will give scale in the US generics market through a wide range of product portfolio in CNS, CVS, anti-infectives, diabetes as well as other value added generics.

Hauppauge, New York based InvaGen Pharmaceuticals is a leading generic pharmaceutical company in the US. InvaGen is engaged in development, manufacturing, marketing and distributing of generic pharmaceuticals. InvaGen has 3 manufacturing units with 3.5 lakh square feet manufacturing and R&D area. It has total production capacity of 12 billion tablets and capsules per annum.

The acquisition of InvaGen pharmaceuticals also provides Cipla with about 40 approved ANDAs, 32 marketed products, and 30 pipeline products which are expected to be approved over the next 4 years. InvaGen has filed 5 products which represent a market size of USD 8 billion in revenue by 2018. Dosage forms include immediate release, modified release and extended release tablets and capsules.

Exelan was incorporated in the year 2011 and is engaged in the business of sales and marketing of generic pharmaceuticals for the government and institutional market. The acquisition of Exelan Pharmaceuticals provides Cipla access to the government and institutional market in the US through Exelan’s deep expertise, engagement and experienced management team in the business.

The combined revenue of the targeted firms were USD 200 million as of CY14 and over USD 225 million in last twelve months period as of June 2015. Cipla's revenue stood at Rs 11345 crore as of FY15. The revenue of the targeted firms stood at 11.63 per cent of the Cipla's revenue as of FY15. According to the company, the entire transaction for the acquisition will be in the form of cash. Cipla is payable to Invagen of USD 500 million and for Exelan is USD 50 million. The transaction is expected to be complete by end of December 2015.

According to  Cipla, 70 per cent of the company's growth would be through the organic route. The company would continue with its strategy of developing joint ventures with pharmaceutical firms in other countries. The share price of the Cipla on BSE increased by 3.5 per cent on early trades and trading at Rs 658.9 on intraday basis.

Cipla is a global pharmaceutical company which uses cutting edge technology and innovation to meet the everyday needs of all patients. The company has exposure across more than 150 countries. Its portfolio includes over 1500 products across wide range of therapeutic categories with one quality standard globally.

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