Thursday 16 February 2012

Strides Arcolab may fetch Rs 1250 cr from sale of domestic units


Bangalore-based Strides Arcolab has received more than ten offers for parts of its domestic generic pharmaceuticals business, the highest of which could value the units being sold at over Rs. 1250 crore, a person familiar with the sale process said on condition of anonymity.
Strides Arcolab is selling its softgel manufacturing units, its antiretroviral (ARV) therapy drug pipeline and parts of its Contract Research & Manufacturing Operations (CRAMS) as it looks to concentrate on its core business of injectable drugs.

Strides Executive Vice Chairman & Group CEO, Arun Kumar declined comment for this story.

Strides has received offers from a variety of global generic drug manufacturers as well as some Indian generic drug-makers and private equity funds for the businesses on offer. The company may be able to conclude the sale of these units by end of March, according to the person quoted above.

Strides recently sold its 94% stake in Ascent Pharmahealth Limited, its subsidiary with operations in Australia and Southeast Asia to US generic drug firm Watson Pharmaceuticals Inc for $393 million.

The company expects to capitalize on drug shortages in the US, especially in the area of injectables, to grow its core business which has higher operating margins and is divesting businesses which have lower margins and using the funds to reduce debt.

Strides has rapidly expanded its US ANDA filings over the past six years to 188 in 2011 of which 120 are filings for injectables products. The company has received USFDA approvals for 53 injectable products of which it has commercialized 40 products.

It has also inked distribution partnerships with global drug majors including
Pfizer, GSK, Sagent, Teva and Sandoz for its injectable products under development across therapeutic areas including oncology.

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