Strides Arcolab slumps after final settlement with Mylan

Strides Arcolab fell 5.41% to Rs 665.50 at 11:45 IST on BSE after the company said it agreed to receive $150 million as the full and final settlement from US-based Mylan Inc.

The announcement was made during trading hours today, 25 September 2014.

Meanwhile, the BSE Sensex was down 95.33 points, or 0.36%, to 26,649.36.

On BSE, so far 1.25 lakh shares were traded in the counter, compared with an average volume of 53,804 shares in the past one quarter.

The stock hit a high of Rs 709 and a low of Rs 628.70 so far during the day. The stock hit a 52-week high of Rs 770 on 16 September 2014. The stock hit a 52-week low of Rs 335.19 on 10 December 2013.

The stock had outperformed the market over the past one month till 24 September 2014, rising 6.65% compared with 1.23% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 16.51% as against Sensex's 5.42% rise.

The mid-cap company has an equity capital of Rs 59.57 crore. Face value per share is Rs 10.

Strides Arcolab has agreed to receive from Mylan Inc., USA, an amount of $150 million as the full and final settlement against the contingent holdback of upto $250 million.

The company said it will provide further updates on or before 7 October 2014.

On 28 February 2013, Bangalore-based Strides Arcolab and US-based Mylan signed the agreement under which the US drug major acquired Agila Specialties, the injectible medicine business of Strides.

Under the terms of the agreement, Strides and its subsidiary received an aggregate sum of $1600 million in cash on closing and a potential additional consideration of up to $250 million subject to the satisfaction of certain conditions by Strides.

Consequent to the warning letter received by Strides Arcolab for one of its units in Bangalore, Strides had agreed to a hold back of $250 million, which was contingent upon satisfaction of certain regulatory conditions related to the injectable facilities in India.

Net profit of Strides Arcolab surged 1140.74% to Rs 26.80 crore on 24.61% rise in net sales to Rs 187.95 crore in Q1 June 2014 over Q1 June 2013.

Strides Arcolab is a pharmaceutical company with a key focus on development and manufacture of IP-led niche generics and bio-pharmaceuticals. It is also among the world's largest manufacturers of specialty soft gelatin capsules.

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