Mylan may make another acquisition in India

Mylan could be sizing up a big acquisition in India, perhaps thinking of buying some operations from SMS Pharmaceuticals.

In a story based on anonymous sources, The Financial Express quotes an investment banker as saying that while a deal is not final, it is close, with the U.S. generics company looking to buy the oncology drug operations of SMS. The banker says it would include a vertically integrated plant that manufactures everything from APIs to finished formulations, including injectables. SMS says on its website it has a "dedicated oncology API and formulations manufacturing facility in Andhra Pradesh to target the niche market segments." Other buyers might also be interested, the report says, but Mylan is the lead on the deal.

Mylan ($MYL) purchased Indian API-supplier Matrix Laboratories in 2007. Since then, Mylan has integrated the two organizations, along with the generics business of Merck KGaA, to build its global pharmaceutical platform. But it has a liking for India. Last year, Mylan announced that it would rebrand Matrix to Mylan and extend its footprint in India by launching its own prescription drugs in that country over the next year.

If true, it would be the second significant deal announced by a U.S. company in India recently. Just two weeks ago, Hospira ($HSP) announced that it would buy an API plant in Aurangabad, India, from Orchid Chemicals & Pharmaceuticals for $200 million.

There, of course, is a lot of interest in India, which not only has a well-established generic drug manufacturing industry but also a growing middle class interested in better treatments. Without being specific about all of the investments, the Indian finance ministry this week said it had approved $333 million in investments by foreign companies after the government said that foreign buyers could purchase up to 49% of established Indian concerns. There had been a rule that first required approval of those deals and many had sat stagnant as public debate swirled around how much outside ownership was appropriate.

- read The Financial Express story

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