Mylan gets PMO nod to acquire Agila Specialities
16 August 2013
The prime ministers office (PMO) today approved Mylan Inc's proposal to acquire Indian company Agila Specialties (formerly Strides Specialties) for Rs5,500 crore, overruling the Department of Industrial Policy and Promotion (DIPP) and the ministry of health, TV business channel CNBC-TV18 reported today.
The FDI policy on pharma brownfield projects will not affect Mylan deal, the PMO said.
"We have a policy in place. If there are issues raised those would be discussed and if need be there to put in additional safeguards or some conditions. But as per the proposals, which have been scrutinised and approved, they will go through. They will come before the Cabinet Committee on Economic Affairs (CCEA) and they will be approved," Anand Sharma told CNBC-TV18.
The deal had been opposed by DIPP on the ground that brownfield foreign direct investment in pharma merely leads to substitution of domestic capital, without bringing in any R&D, while critical treatments for vaccines and oncology are getting taken over by multi-national companies.
Agila was spun off as a separate division following a restructuring in 2009, and functions as a wholly-owned subsidiary of Strides Arcolab Ltd. Strides has one of the the largest capacities for sterile injectables in India and one of the largest freeze-drying capacities in the world.
The company had also drawn interest from Swiss drugmaker Novartis, and Germany's Fresenius SE.
Mylan, a US generic and specialty pharmaceutical company, puts forward the proposal in February to buy the injectable drugs unit of Bangalore-based Strides to expand its presence in the fast-growing generic injectables market. (See: Strides Arcolab sells Agila Specialties to Mylan for $1.6 bn).http://domain-b.com/industry/pharma/20130228_agila_specialties.html
In 2007, Mylan completed the acquisition of 71.5-per cent stake in Matrix Laboratories, one of the world's largest suppliers of active pharmaceutical ingredients (API), announced in august 2006 for $736 million. (See: Mylan completes stake acquisition in Matrix )
Agila makes penicillin, oncology drugs, and sterile injectables, vials, prefilled syringes, ampoules, lyophilization, cytotoxics, and antibiotics.
Yesterday, the Department of Industrial Policy and Promotion (DIPP) asked the Prime Minister's Office to hold an inter-ministerial meeting at the earliest for tightening foreign direct investment norms for brownfield pharmaceutical projects.
The call comes even as a Parliamentary panel report suggested banning such investments.
However, the PMO today approved the takeover.
The acquisition will give Mylan a broad product portfolio of more than 300 filings approved globally and marketed through a network covering 70 countries, including 61 abbreviated new drug applications (ANDAs) approved by the US Food and Drug Administration (FDA).
With this deal Mylan will get more manufacturing capacity in India, as well as around the world.
Agila has nine manufacturing facilities in India, Brazil and Poland, eight of which have been approved by the FDA.
Further, Mylan already had a sterile manufacturing plant in India, as well as one in Ireland.
In May, Mylan had made a proposal to acquire Actavis Inc, the largest US generic drug maker by market value for over $15-billion; However, Actavis rejected the takeover bid (See: Actavis rejects Mylan's $15-bn offer)