Mylan to buy SMS Pharma production units for Rs.173 cr
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Mylan, the second-largest US generic firm with an annual sales of over $6 billion, would be buying a part of Hyderabad-based SMS Pharma for R173 crore ($32.50 million) in order to strengthen its institutional business that caters to hospitals, home-infusion service providers, surgical and radiology services among others. This was confirmed by a Mylan spokesperson.
FE was the first to report last month that Mylan is in late-stage talks with the SMS Pharma to acquire its units manufacturing lucrative cancer therapy drugs — both raw materials and finished drugs — and that the deal could be in the range of R160-200 crore.
At the time, a source had said that part of the business Mylan proposes to buy from SMS Pharma is one of the most advanced oncology facilities in the country, providing end-to-end solutions in cancer therapies. At least two large domestic firms were keen on buying the facility but Mylan clinched the deal, he said.
A Mylan spokesperson told FE on Thursday that the acquisition of this facility will support several of the company's strategic growth drivers, particularly expansion of its institutional business.
The facility, known as Unit 6 and located in Vizag, comprises of both oncology API (active pharma ingredient, raw material) and FDF (fixed dose form, end product) manufacturing units, the company spokesperson added.
Mylan's institutional business offering includes over 60 injectable products, and this acquisition could add significantly to the product basket, particularly in the oncology therapy.
The funds from sale will help SMS Pharma strengthen its existing facilities, cut interest costs and overheads and add to its working capital. In a notice to the stock exchanges, the the company said that its board has identified and finalised Mylan Laboratories as the buyer.
For Mylan, the latest buy is its second major Indian acquisition after it bought Hyderabad-based Matrix Labs for $736 million (R3,424 crore at the time) in 2006. SMS Pharma recorded R226-250 crore revenues in 2011 and 2012.
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