Lupin to buy US’ GAVIS for R 5,600 crore

MUMBAI: Pharma major Lupin has entered into a definitive agreement to buy privately-held GAVIS Pharmaceuticals LLC for $880 million (about `5,600 crore), in a move to strengthen its US generics drugs business.

New Jersey-based GAVIS specialises in developing and marketing niche pharma products. It has 66 abbreviated new drug applications ( ANDA) pending with the US Food and Drug Administration, and a pipeline of over 65 products under development.

Lupin is India’s third-largest drug maker by sales. GAVIS’ New Jersey unit will become Lupin’s first manufacturing site in the US.

The combined company will have a portfolio of 101 in-market products, 164 cumulative filings pending approval and a deep pipeline of products under development for the US market. The acquisition, expected to close in the third quarter, will create the fifth-largest portfolio of ANDA filings with the US FDA, addressing a $63.8-billion market, Lupin said.

“The acquisition aligns with our goal to expand and deepen our US presence,” Lupin CEO Vinita Gupta said.

The acquisition of GAVIS “accelerates” Lupin’s entry into niche areas, including controlled substances and dermatology.

GAVIS reported revenues of $96 million in 2013-14, which could potentially triple by 2018, Gupta added.

Lupin’s acquisition comes in the backdrop of a 16% year-onyear drop in net profit to ` 525 crore during the April-June quarter, as US sales slumped 26%.

The company’s net sales for the quarter fell 6.4% to ` 3,074 crore.

“Slowdown in approvals in the US dampened growth during the quarter,” Lupin MD Nilesh Gupta said.

Lupin’s shares ended down 5.2% on the Bombay Stock Exchange on Thursday.

Over the last month, the US FDA has raised some observations relating to quality control and manufacturing processes at Lupin’s Goa plant. Lupin executives, however, said the concerns have been addressed.