Lupin Plunks Down $880 Million for Privately Held Gavis Pharmaceuticals

Published: Jul 23, 2015

Lupin Plunks Down $880 Million for Privately Held Gavis Pharmaceuticals
July 23, 2015
By Alex Keown, Breaking News Staff

MUMBAI – Lupin Ltd. (LUPN.BO), India’s fourth largest pharmaceutical company, will increase its presence in the United States after striking an $880 million deal to acquire privately held Gavis Pharmaceuticals LLC, the company announced this morning.

The acquisition will increase Lupin’s presence as a generic drug supplier in the United States and will also broaden Lupin's pipeline in dermatology, controlled substance products and other high-value and niche generics, the company said. The acquisition will also give Lupin its first manufacturing site in the United States as it takes over Gavis’ New Jersey manufacturing facility.

Securing a new toehold in the United States through acquisitions will make it easier to market generic drugs in America as the U.S. Food and Drug Administration (FDA) has increased scrutiny of foreign drug manufacturers, making it harder for those manufacturers to find regulatory approval of their wares.

“This is a pivotal acquisition for Lupin as it aligns with our goal to expand and deepen our U.S. presence. Gavis has a strong track record of delivering highly differentiated products in a short time and is poised for continued strong growth as it delivers on its existing pipeline,” Vinita Gupta, Chief Executive Officer of Lupin Limited, said in a statement.

Lupin’s acquisition announcement comes on the same day the company reported its earnings. U.S. sales fell 31 percent to $180 million for April to June, leading to a net profit decline of 16 percent to 5.25 billion rupees, about $82.35 million, Zee News of India reported. Lupin’s stock dropped more than 5 percent to 1,728.25 rupees per share on the Mumbai Stock Exchange this morning, down from a high of 1,835.7 per share.

New Jersey-based Gavis recorded sales of $96 million in 2014 and has more than 250 employees. The company currently has 66 Abbreviated New Drug Applications filings pending approval with the U.S. Food and Drug Administration and a pipeline of more than 65 products under development. Of those new products, 72 percent of those filings pending approval represent niche dosage forms, which represent an estimated $9 billion in sales. To date, Gavis has filed 25 Para IVs and 8 FTFs products, Lupin said.

Veerappan Subramanian, CEO of Gavis, said merging with Lupin will help the company realize its vision of “building a broader, research-based high value, specialty business through organic growth.”

Together Lupin and Gavis will have a portfolio of 101 in-market products, 164 cumulative filings pending approval and a deep pipeline of products under development in the United States. The acquisition creates the 5th largest portfolio of ANDA filings with the US FDA, addressing a USD 63.8 billion market.

Lupin, like many other pharmaceutical companies looking to grow their pipeline and market presence, is growing through acquisitions of other companies.

Earlier this month Lupin acquired Russia-based Biocom for an undisclosed amount of money, giving Lupin its first toehold in Russia. BIOCOM reported sales of 861.2 million rubles, about $15 million in 2014. Biocom is a generic pharmaceutical company with a focus on therapies including cardiovascular, central nervous system and antimicrobials. The Russian company also does contract manufacturing and secondary packaging for other pharmaceutical companies.

In May, Lupin entered the Brazillian pharmaceuticals market by acquiring Medquimica Industria Farmaceutical S.A Brazil (Medquimica) for an undisclosed price, LiveMint reported.

The Lupin/ Gavis deal is expected to be completed later this year.

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