MUMBAI: Dr. Reddy’s Labs has signed a deal with Israeli drug maker Teva and an affiliate of Allergan to acquire a portfolio of eight abbreviated new drug applications (ANDA) in the US for $350 million in cash.
Dr. Reddy’s said it is acquiring the portfolio on a cash-free, debt-free basis and expects to finance the transaction using a combination of cash on hand and available borrowings under existing credit facilities.
It said in a stock exchange filing that the acquired portfolio consists of products that are being divested by Teva as a precondition to its closing of the acquisition of Allergan’s generics business. Last year in April Teva had entered into a deal with Allergan to buy its generics products for $40.5 billion, soon after it failed in its bid to buy Mylan.
Dr. Reddy’s said the acquisition of the ANDAs is contingent on the closing of the Teva/Allergan generics transaction and approval by the US Federal Trade Commission of Dr. Reddy’s as a buyer. Teva’s moves to integrate Allergan’s products had been delayed.
“The combined sales of the branded versions of the products in the US is approximately $3.5 billion MAT for the most recent twelve months ending in April 2016 according to IMS Health,” the company said in its press statement.
Alok Sonig, Head of North America business said, “Dr. Reddy’s has a strong track record in the US market with over 79 filed ANDAs pending approval, of which we believe 18 have first-to-file status. The acquisition of these attractive ANDAs from Teva will enhance our short-to-mid term aspirations and is consistent with our growth initiatives to identify inorganic opportunities to expand our base business.”
In July 2015, ET had reported that Dr. Reddy’s could be among the bidders to buy the assets as part of the divestment process followed by Teva. “There might be a few opportunities coming up for Indian companies where there might be some products from the acquisition that might be put on the block,” GV Prasad, CEO, of Dr Reddy’s had then told ET.
Dr. Reddy’s is aggressively developing its US business through a pipeline of proprietary products specially in skincare and oncology drugs while boosting its generics offerings. It clocked over $1.16 billion from its North America operations, about half of its global sales of $2.33 billion last year.
Source: Economic Times