Hospira buys Indian antibiotic plant
pharmafile | September 6, 2012 | News story | Manufacturing and Production |Â Â Hospira, IndiaÂ
US injectable drugs specialist Hospira has announced plans to expand in India via the purchase of a manufacturing facility and R&D labs from Orchid Chemicals & Pharmaceuticals.
The $200 million deal includes Orchid’s 50,000 sq. m. production unit in Aurangabad, Maharashtra state, which has been operational since 2000 and manufactures active pharmaceutical ingredients (APIs), including a number of penicillin and carbapenem antibiotic products.
Orchid employs 640 people at Aurangabad, while the R&D facility in Chennai has a headcount of around 160 scientists.
Hospira said the acquisition of the FDA-approved manufacturing facility would “reduce Hospira’s costs, support continuity of supply of key antibiotic products and pave the way for future API development”.
Managing director of Hospira India Dr Bhaktavatsala Rao said that the Aurangabad unit is a “top-of-the-line API manufacturing facility that has been recognised by industry leaders for its high standards”.
The deal comes as Hospira is battling to bring a number of its US-based manufacturing facilities into regulatory compliance and restore confidence after a string of product recalls in recent years. Last December the company announced a $375 million investment programme for remediation work at the affected plants.
Meanwhile, the latest acquisition is not the first deal between the two companies. In 2010, Hospira completed the purchase of Orchid’s generic injectable finished-dosage form pharmaceuticals business, a $400m deal that also included manufacturing and R&D units.
The US drugmaker said the purchase of the Aurangabad facility would enable it to “integrate vertically into certain beta-lactam antibiotic APIs (penems and penicillins) with a wide spectrum of antibacterial activity”.
Under the terms of the deal, Orchid will retain its cephalosporin API business and facilities, and will continue to supply Hospira with these ingredients.
In a statement Hospira said the boards of directors of both companies have approved the deal, which should be completed in the fourth quarter.
Phil Taylor
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