Business
India's Lupin will buy U.S.-based Pharmaceuticals GAVIS for $880 million. The acquisition of closely held Gavis “broadens Lupin’s pipeline in dermatology, controlled substance products and other high-value and niche generics,” the Indian drugmaker said in a statement today, reports Bloomberg. Generic drug manufacturers in India are seeking U.S. acquisitions to widen their product pipeline. The U.S. Food and Drug Administration’s increased scrutiny of overseas manufacturers has made it harder to get approvals in the world’s biggest pharmaceutical market. Lupin shares dropped the most in three months in Mumbai on Thursday after earnings missed analyst estimates.
“Slowdown in approvals in the U.S. dampened growth during the quarter,” Managing Director Nilesh Gupta said in a statement. The company reported a 6 percent drop in sales to 30.7 billion rupees ($482 million) in the quarter to June 30, while net income at 5.25 billion rupees fell short of the median 5.74 billion-rupee estimate by analysts.
Lupin's U.S. growth has been hampered by a slower pace of new generic drug approvals since the U.S. Food and Drug Administration (FDA) overhauled its generics review process, as well as by consolidation between drug distributors there, writes Reuters. The company has also recently run into regulatory troubles, with the FDA expressing concerns about manufacturing processes at its Goa plant in western India last month. However, Managing Director Nilesh Gupta said none of the concerns were "serious" and the company had responded to the FDA.
He separately warned the pace of U.S. drug approvals would remain modest in the September quarter, but would pick up through the rest of the year. The company is expecting "material" U.S. approvals of so-called controlled substance products acquired through the GAVIS acquisition, he said. The deal follows three other acquisitions this year by Lupin, aimed at building its presence in Latin America and Russia. It plans to look for more businesses in the speciality generics space in the United States, CEO Gupta said.
