India's Alkem Laboratories is said by the Economic Times to be close to an initial public offering of INR150 billion, or nearly $300 million. The company has a U.S. subsidiary that has indirectly found fairly recent trouble with the U.S. FDA.
The IPO news from the Economic Times and others also nearly repeats a January story by Reuters that said Alkem had appointed banks Nomura and Axis Capital to raise as much as INR150 billion ($291 million) within weeks.
However, the newspaper said times have changed and that the successful IPO of Syngene International, biotechnology major Biocon's research arm, has opened a door broadly for pharmaceutical-related listings.
Biocon easily reached the top end of its range in the IPO of CRO Syngene, selling a nearly 10% stake for around $95 million to fund growth at Biocon, including the development of biosimilar candidates.
The success was notable as well because of a spate of charges against CROs GVK BioSciences and Quest Life Sciences for improper drug testing procedures just ahead of the offer.
In January, Biocon concluded sale of a 10% stake in Syngene to IVF Trustee.
That has reportedly set the stage for Alkem. "Alkem will soon file its draft paper with capital market regulator Securities and Exchange Board of India to float an IPO," sources told the Economic Times.
But Alkem has also indirectly seen trouble in the U.S. as recently as July after Acino Products of Hamilton, NJ, was hauled up by the U.S. FDA for selling unapproved prescription drugs.
The FDA said Ravi Deshpande, president of the company, was peddling unapproved hydrocortisone acetate suppositories under the brand names Rectacort-HC and GRx HiCort 25 to treat inflamed hemorrhoids, chronic ulcerative colitis and other medical conditions. It said that Deshpande was shipping products for Ascend Laboratories, which is a subsidiary of Alkem, but never got them approved.
Last year, marshals seized more than $11 million worth of drugs from a warehouse used by Ascend after it ignored FDA warnings that it was selling unapproved drugs.
The Economic Times said Alkem stands as India's seventh largest pharmaceutical company.
- here's the story from the Economic Times