Pfizer gets CCI nod for Hospira merger

Hospira's subsidiary in India has several facilities and a joint venture with Cadila Healthcare

The Competition Commission of India (CCI) has given its nod for the proposed merger of Pharma major Pfizer and Hospira, in which the latter has various manufacturing operations in India through its wholly owned subsidiary and in joint venture with Gujarat-based Cadila Healthcare.

The order, issued dated June 11, 2015, said that Pfizer Inc filed a notice pursuant to the execution of an Agreement and Pland of Merger between Pfizer, Hospira, Inc and Perkins Holding Company, a wholly owned subsidiary of Pfizer, on February 5, 2015.

The proposed combination is structured as the merger of Perkins with and into Hospira, as a result of which the seperate corporate existance of Perkins will cease and Hospira will survive as a wholly owned subsidiary of Pfizer. Hospira operates in India through Hospira Healthcare India Pvt. Ltd. which is a subsidiary of Hospira and manufactures injectable formulations and active pharmaceutical ingredients (APls) at several facilities across the country. It has also been stated in the notice that Hospira has a 50 - 50 joint venture with Cadila Healthcare Limited, called Zydus Hospira Oncology Private Limited (ZHOPL). ZHOPL manufactures oncology drugs, which are in turn, sold by Hospira outside India and by Cadila in India

Analysing various businesses of both Pfizer and Hospira in India and whether the proposed combination's result on Indian market, the CCI said, "...the Commission is of the opinion that the proposed combination is not likely to have any appreciable adverse effect on competition in India and therefore the Commssion hereby approves the proposed combination under sub-section (1) of Section 31 of the Act (the Competition Act, 2002)".

It may be noted that Hospira has recently received the US Food and Drug Administration (FDA)'s nod to manufacture finished dosage drugs at its Visakhapatnam facility in Andhra Pradesh. The company said that Hospira Healthcare India Private Limited, a subsidiary of Hospira, Inc, received official notification from the US FDA that the inspection of the Visakhapatnam, was deemed acceptable for the manufacture of finished dosage drugs, on June 23, 2015.

"As a result of this action, the company may receive US product approvals from this facility in the future," said the company in a regulatory filing in US.

The plant, which is expected to manufacture speciality injectables, is being set up at a cost of $375-450 million, said the company had said earlier.

On February 5, 2015, Pfizer Inc and Hospira Inc announced they had entered into a definitive merger agreement under which, Pfizer would acquire Hospira, the world's leading provider of injectable drugs and infusion technologies and a global leader in biosimilars, for $90 a share in cash for a total enterprise value of approximately $17 billion.

In December 2009, Hospira acquired the generic injectables business of Orchid Pharma, including the beta-lactam antibiotics manufacturing complex and research and development facility in Irungattukottai, near Chennai, along with its generic injectables product portfolio and pipeline, for about $400 million. In 2012, it had announced the acquisition of Orchid Pharma's penicillin and penem active pharmaceutical ingredient (API) business and the API facility at Aurangabad, Maharashtra, along with associated research & development infrastructure in Chennai, through its Indian subsidiary, for about $200 million.