Mylan looks to sell off Vizag formulations unit it acquired in 2012

Some reports term the move as a case of an acquisition strategy going wrong

American generics drug major Mylan is looking for a buyer for its formulations manufacturing facility in Vizag Pharma City.

While there was no official conformation either on the decision or the reasons behind it from Mylan's Indian subsidiary, sources aware of the matter said the plant has been on the block for some time now.

Mylan, which entered India with its maiden acquisition of Hyderabad-based Matrix Laboratories in 2007, has built a huge global manufacturing base in the country since. Most of this has been through the inorganic route. Twenty-five out of its 40 manufacturing facilities and one of the company's three global R&D centres are located in India.

Mylan had acquired Vizag facility in 2012 for $32.5 million from Hyderabad-based SMS Pharma, which had built this plant to make products for treating cancer.

While there are no concrete details available on why Mylan wants to dispose of this facility, some reports termed the move as a case of an acquisition strategy going wrong in this instance.

A senior management executive of a Hyderabad-based pharmaceutical company, which was considered to be among the potential buyers of the plant, responded to a query in this regard by saying, "There was no such deal at this time."

A senior official heading Hyderabad- headquartered Mylan did not respond to calls and text messages seeking clarification on the reported decision to sell off the Vizag facility.

The move is expected to have a little impact on overall India growth plans of Mylan, which has already emerged as the third largest pharma exporter in India. All of its nine active pharmaceutical ingredient (API) plants, eight oral solid dosage and eight injectable plants are in India, as the country offers a low-cost advantage in addition to the required chemistry talent to the company.

India's manufacturing base primarily contributes to the company's global anti-retro viral (ARV) drug portfolio. It also produces generic products used in critical care, hepato care, cancer treatment and women care.

More than 60 per cent of Mylan's drugs are produced in India. The American generics company achieved $10 billion revenues in global sales for the first time in 2016.

While Mylan has done a series of acquisitions in India during the past ten years, the $736 million Matrix Laboratories' buy-out in 2007 and the $1.3 billion acquisition of Agila Specialties in 2013 turned it into a major global generics player.

With the acquisition of Agila Specialties, Mylan had significantly expanded and strengthened its global injectable platform by adding six additional injectables facilities in the country. It has R&D facilities for API and other products at Hyderabad and for injectables at Bengaluru.