Mitsui boosts contract manufacturing business
pharmafile | October 4, 2010 | News story | Manufacturing and Production |Â Â API, Arch Pharmalabs, India, MitsuiÂ
Mitsui & Co has taken a 5% stake in Indian active pharmaceutical ingredients manufacturer Arch Pharmalabs in a $13 million deal that it says will help boost its position in the contract manufacturing sector.
The Japanese conglomerate already provides a range of services to drugmakers including the supply of raw materials, chemical intermediates and active pharmaceutical ingredients (APIs), formulation manufacturing and transportation logistics, but has said it wants to expand this business.
“Today’s agreement with Arch makes Mitsui one of the first Japanese conglomerates to take a stake in an Indian contract manufacturing organisation in the industry,” it said.
Previously, Mitsui said it intends to build a broad outsourcing platform for pharma across manufacturing, R&D, distribution and sales. The agreement with Arch Pharma will help it to supply “key raw materials both in the Asia Pacific region and the world”.
Meanwhile, the company has forged similar equity-based partnerships with other outsourcing specialists serving pharma in the R&D sector. For example, earlier this year it acquired a 49% stake in Gleneagles CRC Pte, a Singapore contract research organisation (CRO) that provides clinical trial support services throughout Asia.
For Arch, having Mitsui as a partner opens the door for expanded business among pharmaceutical manufacturers in Japan, which remains the second-largest drug market in the world.
Mitsui points out that with much of big pharma facing a patent cliff in 2010 and beyond – with many blockbuster drugs expected to encounter generic competition in the near future – multinationals are moving production to India to tap into its “competitive technology and pricing”.
Arch, which specialises in generic APIs and pharmaceutical intermediates, is currently majority-owned by investment firms Swisstec Ventures, IL&FS ICICI Venture and is planning an initial public offering (IPO) next year.
Mitsui and Arch have been collaborating for several years, but a formalised arrangement could boost the value of Arch when it files the IPO.
Phil Taylor
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