12.16.09
Hospira will acquire the generic injectable finished-dosage form pharmaceuticals business of Orchid Chemicals & Pharmaceuticals for approximately $400 million.
The acquisition includes Orchid's beta-lactam antibiotics manufacturing complex (comprising cephalosporin, penicillin and carbapenem facilities) and R&D facility at Irungattukottai, Chennai, as well as its generic injectable product portfolio and pipeline. Beta-lactam antibiotics represent a class of drugs with a wide spectrum of antibacterial activity.
In addition, the companies signed a long-term exclusive agreement for Orchid to supply APIs for the acquired generic injectable pharmaceuticals business. This agreement builds on the existing product development and commercialization relationship between Hospira and Orchid.
According to a Hospira statement, the move provides several benefits:
"This acquisition aligns perfectly with Hospira's strategy to improve our margins and cash flow, by lowering our cost position for a key product line, and to invest for growth, by expanding our presence globally and reinforcing our leadership position in generic injectables," said Terry Kearney, chief operating officer, Hospira. "Orchid's quality, speed to market and productivity are hallmarks of its business. We look forward to welcoming our new colleagues from Orchid and leveraging their collective knowledge to meet the evolving needs of Hospira's customers."
"This transaction and the long-term API contract are a testimony to the competitiveness of Orchid's product portfolio in the global pharmaceuticals landscape, and its established capabilities in aseptic product manufacture.We are confident that Hospira will take our generic injectable pharmaceuticals business to even greater heights and provide enhanced career prospects to the employees being transferred. This transaction will provide Orchid with the financial flexibility to pursue new growth opportunities, and build upon our successful track record of value creation for our shareholders," said K. Raghavendra Rao, managing director, Orchid.
In 2005, Mayne Pharma Ltd. (now part of Hospira) and Orchid entered into a strategic commercialization and development agreement. Subsequent agreements have added to the scope of the relationship. The acquisition is expected to be completed in 1Q10. To help facilitate the transition process, the two companies will enter into transitional services agreements for approximately 12 months.
The acquisition includes Orchid's beta-lactam antibiotics manufacturing complex (comprising cephalosporin, penicillin and carbapenem facilities) and R&D facility at Irungattukottai, Chennai, as well as its generic injectable product portfolio and pipeline. Beta-lactam antibiotics represent a class of drugs with a wide spectrum of antibacterial activity.
In addition, the companies signed a long-term exclusive agreement for Orchid to supply APIs for the acquired generic injectable pharmaceuticals business. This agreement builds on the existing product development and commercialization relationship between Hospira and Orchid.
According to a Hospira statement, the move provides several benefits:
- Hospira acquires a proven-quality, cost-competitive generic injectables manufacturing site that has approvals from international regulatory authorities, including the FDA, as well as an R&D facility and a talented base of approximately 450 employees dedicated to the development and production of beta-lactam antibiotics.
- The move secures full ownership of Hospira's primary beta-lactam portfolio and pipeline that were previously part of a commercialization agreement with Orchid.
- Hospira can establish a direct presence in India, providing a platform for future commercial growth.
"This acquisition aligns perfectly with Hospira's strategy to improve our margins and cash flow, by lowering our cost position for a key product line, and to invest for growth, by expanding our presence globally and reinforcing our leadership position in generic injectables," said Terry Kearney, chief operating officer, Hospira. "Orchid's quality, speed to market and productivity are hallmarks of its business. We look forward to welcoming our new colleagues from Orchid and leveraging their collective knowledge to meet the evolving needs of Hospira's customers."
"This transaction and the long-term API contract are a testimony to the competitiveness of Orchid's product portfolio in the global pharmaceuticals landscape, and its established capabilities in aseptic product manufacture.We are confident that Hospira will take our generic injectable pharmaceuticals business to even greater heights and provide enhanced career prospects to the employees being transferred. This transaction will provide Orchid with the financial flexibility to pursue new growth opportunities, and build upon our successful track record of value creation for our shareholders," said K. Raghavendra Rao, managing director, Orchid.
In 2005, Mayne Pharma Ltd. (now part of Hospira) and Orchid entered into a strategic commercialization and development agreement. Subsequent agreements have added to the scope of the relationship. The acquisition is expected to be completed in 1Q10. To help facilitate the transition process, the two companies will enter into transitional services agreements for approximately 12 months.