Pfizer Inc. Said to Weigh Purchase of Strides Arcolab Limited Agila Unit

Published: Jan 15, 2013

Pfizer Inc. (PFE), the world’s largest drugmaker, is among companies weighing a purchase of the injectable-medicines unit of Indian drug supplier Strides Arcolab Ltd. (STR), said three people with knowledge of the matter. Pfizer began due diligence last week for a possible acquisition of the Bangalore-based company’s division known as Agila Specialties, the people said, asking not to be identified as the process is private. The unit may be valued at about $2 billion, two of the people said. Strides provides Pfizer with generic versions of off-patent drugs through a partnership announced in 2010. Agila has also drawn interest from Canonsburg, Pennsylvania-based Mylan Inc., Swiss drugmaker Novartis AG (NOVN), and Fresenius SE, which is based in Bad Homburg, Germany, two of the people said. A deal could be reached in the first quarter, they said. Large drugmakers are seeking acquisitions to offset a potential decline in revenue as U.S. patents expire. With drugs losing patent protection this year and last, New York-based Pfizer may lose as much as $2.75 billion in sales in 2013, data compiled by Bloomberg show. Strides rose as much as 3.9 percent to 1095 rupees in Mumbai today, the most since Dec. 24. Representatives for Pfizer, Mylan and Novartis declined to comment, while a spokesman for Strides didn’t respond to requests for comment. “As a market leader, Fresenius is very often brought into contact with companies that potentially may be for sale,” Fresenius spokesman Matthias Link said in an e-mail. He declined to comment on any potential deal with Strides. Strides started trying to sell Agila last year, three people with knowledge of the matter said in August. Agila, which makes cancer treatments and antibiotics, accounted for 74 percent of Strides’s earnings before interest, taxes, depreciation and amortization in the nine months through September, a company release from October shows.

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