Mylan to buy Indian generic drug maker for $1.6B
Generic drug maker Mylan Inc. said on Wednesday that it will acquire an Indian maker of generic injectable medicines for $1.6 billion, expanding its manufacturing capacity and portfolio in an area of generics in which quality concerns have led to a shortage of treatments.
The all-cash deal for Agila Specialties Private Ltd. also will make Mylan a bigger player in generic injectables and increase its footprint in emerging markets, especially in Brazil where the India-based company it is acquiring gets a significant amount of business.
“Agila will bring us one of the most state-of-the-art, high-quality injectables manufacturing platforms in the industry,” said Heather Bresch, chief executive of Cecil-based Mylan.
Along with its nine facilities in India, Brazil and Poland — eight of which are approved by the Food and Drug Administration to make drugs for the U.S. market — Agila gives Mylan more than 300 products.
Mylan's portfolio of injectables includes more than 500 medicines, and it has two injectable manufacturing plants in Ireland and India. Injectables include antibiotics and treatments for cancer among other drugs.
Agila is a subsidiary of Strides Arcolab Ltd., an Indian pharmaceutical company, which also could receive up to $250 million in additional payments if it meets certain unspecified conditions.
Bresch told analysts on a conference call announcing the deal and the company's fourth-quarter earnings that Agila's plants will make it easier for Mylan to better fill America's unmet need for sterile injectable drugs.
The FDA has estimated that shortages of sterile injectables account for 80 percent of drug shortages in the United States, and about 40 percent of those shortages are because of quality problems, Bresch said.
The expanded manufacturing capacity and large portfolio of more than 800 injectable medicines will position Mylan to meet demand from a global generic injectables market that is expected to grow by 13 percent a year through 2017, the company said.
Brazil is a growing market “that Mylan has been looking at for some time,” Mylan President Rajiv Malik said. About 27 percent of Agila's sales come from the South American country of nearly 200 million people.
Mylan expects the deal to close in the fourth quarter and immediately begin to add to its earnings.
The company reported fourth-quarter earnings of $162.0 million, or 39 cents a share, up from $129.5 million, or 30 cents a share, in the same period a year ago.
The quarter capped what Bresch said was “our best year to date.”
For the full year, net income was $640.9 million, or $1.52 a share, compared with $536.8 million, or $1.22 a share, in 2011. For 2013, Mylan is predicting adjusted earnings per share of $2.75 to $2.95.
The announcements came after stock markets closed on Wednesday.
Alex Nixon is a staff writer for Trib Total Media.
He can be reached at 412-320-7928 or email@example.com.