Dr Reddy’s acquires Mayne Pharma’s USA prescription portfolio for $105 mn

Dr Reddy’s Laboratories (DRL) has entered right into a definitive settlement to amass the US generic prescription product portfolio of Australia-based Mayne Pharma Group for $90 million (Rs 738 crore) upfront and contingent funds of as much as $15 million (Rs 123 crore).

The acquisition will complement DRL’s US retail prescription pharmaceutical enterprise with restricted competitors merchandise. The worth of the whole addressable marketplace for the pipeline and authorized non-marketed merchandise within the US is roughly $3.6 billion for the calendar yr ending December 2022, based on IQVIA.

DRL’s inventory was down nearly 3 % in morning commerce.

DRL SA, a wholly-owned subsidiary of Hyderabad-based DRL is about to amass the US generic prescription product portfolio of Salisbury, Australia-based Mayne Pharma Group.

The portfolio contains roughly 45 industrial merchandise, 4 pipeline merchandise, and 40 authorized non-marketed merchandise, together with quite a lot of generic merchandise targeted on ladies’s well being. For the monetary interval ended June 30, 2022, Mayne Pharma reported complete income of $111 million for the acquired portfolio.

Authorised high-value merchandise embody a hormonal vaginal ring, a contraception tablet, and a cardiovascular product. “Beneath the phrases of the settlement, DRL will purchase the portfolio for an upfront cost of roughly $90 million in money, contingent funds of as much as $15 million, consideration in the direction of stock, and credit for sure accrued channel liabilities to be decided on the deadline,” the corporate mentioned in an announcement.

Through the third-quarter earnings name the corporate indicated that it’s not concentrating on any massive acquisitions however is reasonably taking a look at buying complementary merchandise or companies.

The closing of the transaction is topic to the passable completion of customary closing situations together with the relevant ready interval below the Hart-Scott-Rodino Antitrust Enhancements Act of 1976 (HSR Act), as amended.

Erez Israeli, Chief Government Officer, DRL, mentioned, “The US has all the time been an vital marketplace for us. The portfolio of merchandise acquired from Mayne Pharma is a strategic match with our development targets. The portfolio contains some excessive entry-barrier merchandise. It additionally enhances our present portfolio by introducing merchandise targeted on ladies’s well being. Our sturdy stability sheet allows us to amass merchandise of strategic significance to strengthen our base enterprise and construct for long-term development.”

In line with analysts, the timing is essential for selecting product filings and launching area of interest and differentiated merchandise within the US market. In a latest report, Dolat Evaluation and Analysis Themes analysts have identified that the US generic market is dealing with a confluence of headwinds with the variety of filers per generic drug growing, greater value erosion during the last 5 years, price escalation on the uncooked supplies, energy and transportation hurting the US greater than different companies and so on.

“Within the above state of affairs, we consider the timing is essential for selecting product filings and launching area of interest and differentiated merchandise away from the gang and constructing a franchise on the specialty aspect the place there are limitations to entry to even out a number of the above headwinds,” the brokerage had mentioned.

Marc Kikuchi, Chief Government Officer, North America enterprise, DRL, mentioned, “This vital acquisition supplies our North America group with a major foothold within the ladies’s well being house. The acquisition is in step with our acknowledged technique to boost our portfolio in our chosen development markets. We’re well-positioned to efficiently combine the portfolio and develop the enterprise.”