Signs agreements to acquire 100 per cent of generic businesses in the US for $550 million
Cipla’s UK arm, Cipla EU has 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 $550 million and will be an all cash transaction. The combined revenue from these transactions is over $200 million for the year ended December 2014 and over $225 million in LTM June 2015.
The acquisition will give the company scale in the US generics market through a wide ranging product portfolio in CNS, CVS, anti-infectives, diabetes as well as other value-added generics. InvaGen offers a large capacity manufacturing base in Hauppauge, NY and a skilled US-based R&D organisation, Cipla’s first such presence in the US.
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 four years. They represent a balanced, diversified and growing portfolio targeting highly attractive, large and niche markets. In addition, InvaGen has filed five first-to-file products which represent a market size of ~$8 billion in revenue by 2018. Dosage forms include immediate release, modified release and extended release tablets and capsules. With a manufacturing footprint of ~350,000 sq.ft of GMP area, InvaGen has three units located in Long Island, NY, with a total production capacity of 12 billion tablets and capsules per annum and about 500 employees. This acquisition further provides Cipla with an access to large wholesalers/retailers in the US.
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.
Subhanu Saxena, Managing Director and Global Chief Executive Officer, Cipla said: “This investment is in line with Cipla’s strategy to grow Cipla’s share in the US pharma market. We see InvaGen as a strong strategic fit with a relevant diverse portfolio as well as a strong market and customer presence. With a local manufacturing facility, Cipla can further strengthen its presence and commitment to serve patients in the country.”
Tim Crew, Chief Executive officer, North America and Director, Cipla USA said, “We are delighted with the immediate and substantial relevance this combination brings to Cipla in the USA. We are committed to an orderly transition process with customers and InvaGen to ensure the on-going continuity of a high quality and reliable supply to our customers and their patients.”
Dr Sudhakar Vidiyala, President and Chief Executive Officer, InvaGen Pharmaceuticals, commented, “This is an exciting opportunity for InvaGen to join with Cipla. InvaGen brings an experienced team and good manufacturing capabilities to the partnership. We are confident that the combination of InvaGen and Cipla will significantly enhance the product portfolio offering, including specialty products, to the US patients and will give InvaGen access to Cipla’s global expertise and presence.”