Cipla, Lupin in UCB U.S. generics bid as India-linked M&A heats up

Cipla CEO Subhanu Saxena

India's Cipla and Lupin made first-round bids for the U.S. generics business of Belgium's UCB, Kremers Urban Pharmaceuticals, according to sources cited by Bloomberg, showing that domestic players are eagerly looking abroad to boost sales.

Lupin and Cipla did not immediately return emails seeking comment on the report, which follows a scrapped effort estimated to be looking at a $1.5 billion price tag with private equity investors Advent International and Avista Capital Partners after the U.S. FDA asked Kremers Urban for an additional study on its copy of Johnson & Johnson's ($JNJ) Concerta pill for attention deficit hyperactivity disorder (ADHD) to insure its equivalency.

According to Bloomberg, the offers were made in late April and valued the business at about $1 billion, four sources cited by Bloomberg said.

UCB is no stranger to Indian firms. In April, Dr. Reddy's Laboratories said it agreed to buy some brands of UCB for 8 billion rupees ($128.3 million) in India, Nepal, Sri Lanka and Maldives, making a side deal as part of a broader growth drive in manufacturing and injectables.

The revenues from these brands notched up to about 1.5 billion rupees in 2014, the Indian generic drugmaker said.

The acquisition of UCB's existing drugs in dermatology, respiratory and pediatric diseases will further expand Dr. Reddy's footprint in these fast growth areas, the company said.

And last month, Lupin said it has aggressive plans to go out and buy the sales it needs to please investors. It plans to do so by acquiring enough other companies to add $1 billion to its sales revenues and make Lupin a $5 billion drugmaker within three years.

As well, India's top drug company, Sun Pharmaceutical Industries apparently has another $7 billion burning a proverbial hole in its pocket and is looking for deals, while Singapore's Temasek Holdings has made a collective cash infusion of $567.7 million into Sun Pharmaceutical, Glenmark Pharmaceuticals and Intas Pharmaceuticals in less than a year.

- here's the story from Bloomberg