Is Pfizer drawing near to a $2B deal for Strides' injectables unit?

Pfizer ($PFE) is getting serious about a deal for Agila Specialties, the Indian maker of injectable generics, or so the story goes. A unit of Strides Arcolab, Agila has been on the block since last year--and Pfizer has been rumored among the possible buyers--but sources now tell Bloomberg that the U.S. drugmaker is digging through Agila's books, doing due diligence for a possible purchase.

Other companies are said to be interested as well--including Mylan ($MYL), Novartis ($NVS), and Germany's Fresenius, presumably through its drugs unit Fresenius Kabi--with a deal valued at $1.6 billion to $2 billion.

Pfizer has an existing supply arrangement with Strides, which involves some 38 injectables, primarily cancer drugs, for the U.S., E.U. and several Asian markets. The tie-up, begun in January 2010 and expanded soon after, is part of Pfizer's build-up in generics as an off-set to competition for newly off-patent drugs. Other Big Pharmas have tapped Strides as a supplier as well, including Novartis and GlaxoSmithKline ($GSK).

At a time when injectable drugs are running scarce, Agila could be a plum purchase for another drugmaker. The company has a growing manufacturing network, with 14 plants in 6 countries, and it has a reputation for quality. Its sales are growing fast; 10 billion rupees ($183 million) for the first 9 months of its fiscal year, up from 7.4 billion rupees ($135 million).

If Pfizer really is eyeing an eventual spinoff of its established products unit, as new comments from a top executive suggest, then it will likely be looking for ways to build up its generics business in advance. An Agila deal might do just that.

- see the Bloomberg story

Suggested Articles

Turns out Procter & Gamble didn’t want Pfizer’s consumer health unit after all. But it did want Merck KGaA’s.

Private equity firm, in exclusive talks with Sanofi, says it'll invest to pump up Zentiva into an "independent European generics leader."

With suitor Takeda circling Shire, the Dublin-based target has pulled off a deal of its own.