Actavis acquires Grandix manufacturing plant
Actavis Group, an international generic pharmaceuticals company has acquired the three-year-old manufacturing factory of Chennai-based Grandix Pharma for an undisclosed sum.
Not divulging the deal size, Grandix Pharma managing director Dr A Ramamurthy told ET that the facility was set up for dual purpose – one for the domesitc market and another to serve the US market. But due to tax problems, the company has decided to outsource from northern states like Himachal and Uttaranchal.
The company is hiving off its manufacturing arm as the cost to maintain it upto US standards were exorbitant, he said.
It had taken Rs 15.3 crore for setting up the 50,000 sq ft facility over a four acre land in Alathur, 40 km from the city. Grandix is eyeing a turnover of Rs 52 crore by March 2007, he added.
Grandix owns and operates the facility, which manufactures a wide range of solid oral dosage formulations with a current production capacity of 700 million tablets per year. It is engaged in manufacturing and marketing of anti-diabetic, anti-hypertension pain killers and neutraceutical categories.
The company had earlier diluted 30% of its equity by placing nine lakh shares of Rs 10 each at a premium of Rs 90 with two US venture capital funds, namely, Xenox and Agnus. It has a presence in seven states.
The acquisition is aimed at helping Actavis to have its own low-cost manufacturing capability in India from which it can develop and manufacture products for the US and key markets in Europe. Actavis has recently got a new API (Active Pharmaceutical Ingredient) development unit, which allows it to do backward integration of its business.
Actavis also intends to use the facility as a manufacturing site to develop and re-launch older products as many of these products need lower cost base to be competitive in the international marketplace, according to sources.
The company plans to increase the manufacturing capacity of the plant to about four billion tablets over the next 18 months and strengthen the development and regulatory affairs units.
The acquisition follows the Acatvis’s purchase of Lotus Laboratories, a Contract Research Organisation (CRO) based in Bangalore, in February 2005. Lotus has the annual capacity to complete over 160 bio-equivalence studies and the ability to reduce the Group’s R&D expenditure.
Actavis has opened a new API development facility in India, with the aim of developing 10-15 products a year. The unit has already started development of the first ten. The new site is 1,000 sqm and over 50 specialists have already been hired.
The first US ANDA for the plant was submitted in June 2006. The acquired plant will operate under the Actavis name and the Company will not acquire any other business from Grandix, which will continue its other activities.
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