Mylan looks to sell off formulations facility in Vizag

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

While there has been no official confirmation forthcoming from Mylan’s Indian subsidiary on the matter, however, sources aware of the developments say the plant has been on the block for some time now.

The company entered India ten years ago on the back of its maiden acquisition of Hyderabad-based Matrix Laboratories in 2007. Since, then Mylan has built a huge global manufacturing base in the country, mostly through inorganic route. Out of its 40 manufacturing facilities 25 as well as one of the three global R&D centers of the company are located in India.

Mylan acquired Vizag facility in 2012 from Hyderabad-based SMS Pharma for $32.5 million. SMS Pharma had built this plant for products related to cancer therapy. 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 company’s acquisition strategy going wrong.

A senior management executive of a Hyderabadbased pharmaceutical company, which was considered to be among the potential buyers of the plant, responded to a query in this regard by saying, ‘there is no such deal happening at this time’. A senior Mylan official heading Hyderabad- headquartered Mylan Industries 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 currently is the third largest pharma exporter in India. All of its 9 active pharmaceutical ingredients (API) plants besides 8 oral solid dosage and 8 injectable plants are in India, as the country offers a low-cost manufacturing advantage in addition to the much required talent to the company. India’s manufacturing base primarily contributes to the company’s global anti-retro viral (ARV) drug supplies. 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 produced in India. American generics company has achieved $10 billion revenues in global sales for the first time in 2016. While Mylan has carried out a series of acquisitions in India in the last ten years, the $736 million Matrix Laboratories’ buy-out in 2007 and the $1.3 billion acquisition of Agila Specialties in 2013 have been responsible for making it 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 an injectables research facility at Bengaluru.