Mylan buys Indian production unit from SMS Pharma for $33 million

Mylan buys Indian production unit from SMS Pharma for $33 million

India’s SMS Pharmaceuticals confirmed that it has sold its manufacturing units in Visakhapatnam, Andhra Pradesh, to U.S. generic drugmaker Mylan Laboratories for $33 million. The unit is makes bulk drugs and formulations for cancer treatment.  The deal is the  second Indian acquisition by Mylan after it acquired 71.5 % of  Matrix Laboratories, one of the world’s largest suppliers of active pharmaceutical ingredients , in 2006 for $736 million and was rebranded under the Mylan name last year to launch the US firm’s generic drugs onto the Indian market.
SMS Pharma is focused on API manufacturing and claims to be the single largest producer of anti-ulcer products. The firm has also expanded into CRAMS and set up an oncology API and formulations manufacturing facility. The funds from sale will help SMS Pharma strengthen its existing facilities, cut interest costs and overheads, as well as improving working capital.  The Visakhapatnam facility bought by Mylan is yet to be approved by the US Food and Drug Administration. SMS Pharma said that the sale will not have much impact on its revenues and “will create a path for strategic alliances with the multinational as well as business development by way of getting multiple products. SMS Pharma has seven manufacturing facilities and two R&D centers. Two manufacturing facilities, (in Hyderabad and Vijayanagarm districts) are approved by the FDA.

Earlier this year, U.S.  injectable generic drugs specialist Hospira reached an agreement to acquire an active pharmaceutical ingredient manufacturing facility, together with an associated R&D facility from India’s Orchid Chemicals & Pharmaceuticals, for  $200 million. Acquisition of the , US FDA-approved facility is expected to reduce Hospira’s costs, support continuity of supply of key antibiotic products and pave the way for future API development.


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