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A powerful injection
PITTSBURGH—In what its CEO, Heather Bresch, calls a move to make the company a leading manufacturer of biotechnology drugs, Mylan Inc. has inked an agreement to acquire India's Agila Specialties Pvte. Ltd., a developer of generic injectable products, for $1.6 billion in cash.
In announcing the deal on Feb. 27, Mylan said the addition of Agila, which is a business unit of Strides Arcolab Ltd., will broaden Mylan's portfolio of off-patent injectable medicines, which are currently in high demand due to drug shortages in the United States.
"The addition of Agila to our existing injectables platform will immediately create a new, powerful global leader in this fast-growing, attractive market segment and accelerate our target of becoming a top-three global player in injectables. Further, the acquisition of this unique asset delivers on several of Mylan's strategic growth drivers by further expanding and diversifying our product portfolio and geographic reach, strengthening our presence in the institutional channel, and positioning us to maximize our generic biologics portfolio," Bresch said in a statement.
The acquisition is expected to be immediately accretive to Mylan's adjusted diluted earnings per share following closing. The transaction is expected to close in the fourth quarter, subject to regulatory approvals and certain closing conditions.
Mylan, which boasted that it currently holds the position as the world's second-biggest generic drugmaker, looked at other injectable-drugs companies and their assets, but was disappointed, according to Bresch.
"A lot of these facilities out there are really old," Bresch stated. "I would say that what differentiated Agila is their state-of-the-art, high-quality facilities."
Agila's India plant is said to be one of the largest sterile facilities and has one of the largest lyophilization capacities in the world. Agila has other plants in Brazil and Poland, eight of which have been approved by the U.S. Food and Drug Administration (FDA).
"Agila will bring us one of the most state-of-the-art, high quality injectables manufacturing platforms in the industry. Our significantly expanded manufacturing capacity will allow us to vertically integrate our injectables platform and fast-track our ability to pursue additional product opportunities and partnerships to facilitate long-term growth," Bresch stated.
Agila has a broad product portfolio of more than 300 filings approved globally and marketed through a network covering 70 countries, including 61 abbreviated new drug applications (ANDAs) approved by the FDA. Agila also has a global pipeline of approximately 350 filings pending approval, including 122 ANDAs pending FDA approval.
"By combining Agila's strong injectables capabilities with Mylan's powerful global engine, we will catapult our injectables business to a new level," said Mylan President Rajiv Malik. "Agila will bring Mylan one of the deepest and broadest global injectables portfolios in the industry, and together, we will have more than 700 marketed injectables products and a global pipeline of more than 350 injectables products pending approval."
Arun Kumar, executive vice chairman and group CEO of Strides Arcolab, said the company's partners, customer and employees stand to benefit "significantly from Mylan's global reach and strong position in the global generic and specialty pharmaceutical sector."
"I am excited by the combination of our Agila business with Mylan, as it allows Mylan to leverage its operational base to become a leading global injectables company in the coming years, and offers great opportunities to the employees who have made Agila what it is today," Kumar said. "Mylan's longstanding commitment to quality, its track record of integrity and reliability, and powerful global platform make Mylan the perfect fit for this business, both culturally and from a commercial perspective."
Following the announcement, Mylan announced that its fourth-quarter earnings rose 25 percent. For the year, the company said it expects adjusted earnings of $2.75 to $2.95 a share, compared with its prior view of about $2.75 a share. Mylan forecast 2013 revenue between $7 billion and $7.4 billion. Analysts polled by Thomson Reuters most recently projected full-year revenue of $7.16 billion.