Cipla gains after announcing acquisition of two US companies

Cipla was up 1.04% at Rs 663.75 at 10:34 IST on BSE after the company announced acquisition of two US-based pharma companies for total cash consideration of $550 million.

The cash consideration payable for acquisition of InvaGen Pharmaceuticals Inc. is $500 million and the cash consideration payable for the acquisition of Exelan Pharmaceuticals Inc. is $50 million. Cipla said that the acquisition of these two US based companies will give the company scale in the US generics market through a wide range of product portfolio in CNS, CVS, anti-infective, diabetes and other value added generics. The revenue of these two companies combined stood at $225 million for trailing twelve months ended 30 June 2015.

InvaGen has 3 units located at Long Island in New York, with a total production capacity of 12 billion tablets and capsules per annum. This acquisition further provides Cipla with an access to large wholesalers and retailers in the US. In addition, InvaGen has filed 5 first-to-file products which represent a market size of about $8 billion in revenue by 2018.

InvaGen pharmaceuticals has about 40 approved ANDAs (Abbreviated New Drug Application), 32 marketed products and 30 pipeline products which are expected to be approved over the next 4 years. This represents a balanced, diversified and growing portfolio targeting highly attractive, large and niche markets, Cipla said. InvaGen also has a skilled US-based R&D outfit.

Exelan is engaged in the business of sales and marketing of generic pharmaceuticals for the government and institutional market in the United States.

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