Lupin to buy two firms for $880 m

In a move that will enhance the company’s scale in the US generic market, Lupin has decided to acquire GAVIS Pharmaceuticals and Novel Laboratories for $880 million.

The transaction, which is cash and debt-free, has been approved by boards of both the companies and is subject to certain closing conditions.

The acquisition enhances Lupin’s scale in the US generic market and also broadens its pipeline in dermatology, controlled substance products and other high-value and niche generics. GAVIS brings to Lupin a highly-skilled US-based R&D organisation which would complement Lupin’s Coral Springs, Florida, inhalation R&D centre. GAVIS’s New Jersey-based manufacturing facility will become Lupin’s first manufacturing site in the US, Lupin said.

GAVIS is a privately held company specialising in formulation development, manufacturing, packaging, sales, marketing, and distribution of pharmaceuticals.

GAVIS recorded sales of $96 million in FY 2014 and has over 250 New Jersey-based employees. GAVIS currently has 66 ANDA filings pending approval with the US FDA and a pipeline of over 65 products under development. 72 per cent of these filings pending approvals represent niche dosage forms.

To date, GAVIS has filed 25 Para IVs and eight FTFs products. GAVIS’s pending filings address a market value of about $9 billion.

The combined company will have a portfolio of 101 in-market products, 164 cumulative filings pending approval and a deep pipeline of products under development for the US.

The acquisition creates the fifth largest portfolio of ANDA filings with the US FDA, addressing a $63.8 billion market, Lupin said.

“We are confident that Lupin’s proven commercialisation capabilities, vertically integrated manufacturing operations and supply chain strengths will accelerate GAVIS’s growth. The acquisition is expected to be accretive to the earnings from the first full year of operations,” Lupin Chief Executive Officer Vinita Gupta said.

“This is a time of globalisation for the specialty pharmaceutical industry and GAVIS is well positioned to capitalise on this exciting opportunity.”

“Joining forces with Lupin will help realise our vision of building a broader, research-based high value, specialty business through organic growth. I am confident that the combined entity will be a powerhouse in the US specialty space and will significantly enhance Lupin’s US platform,” Veerappan Subramanian, Founder and CEO of GAVIS, said.