Aurobindo Pharma arm inks pact with Shandong Luoxin to form JV in China

Drug firm Aurobindo Pharma on Tuesday said its arm Helix Healthcare BV has entered into a pact with Shandong Luoxin Pharmaceutical Group Stock Co to establish a JV firm in China to manufacture nebuliser inhaler and other products for China, the US and the EU.

"The percentage of shareholding in the joint venture company will be 30 per cent and 70 per cent between Helix and Luoxin," Aurobindo Pharma said in a filing to BSE.

The company's wholly-owned subsidiary Helix Healthcare BV, Netherlands, has entered into an agreement with Shandong Luoxin Pharmaceutical Group Stock Co, China (Luoxin), to establish a joint venture company in China with facilities to manufacture nebuliser inhaler and other products for China, US and EU markets, it added.

"However, for Europe markets, the new joint venture (JV) company will establish its fully-owned subsidiaries in any of the European countries," Aurobindo Pharma said.

The JV will also undertake contract manufacturing for non-nebuliser inhaler products, it added.

As per the terms of the agreement, Luoxin has the right to appoint three directors and Helix has the right to appoint on director in JV, Aurobindo Pharma said.

"Both parties have rights to subscribe in proportion of their shareholding in case of any further issuances by the JV," it added.

Neither Aurobindo nor Luoxin shall set up any other manufacturing facility in China for similar products either by themselves or through their affiliates, Aurobindo Pharma said.

"Commencement of commercial production of the JV is expected during 2021," it added.

Shares of Aurobindo Pharma closed at Rs 737 per scrip on BSE, up 0.53 per cent from its previous close.