Indian pharma snaps up U.S. manufacturing with $1.5B worth of deals in 2015

Cipla closed a $550 million deal last week that got the Indian drugmaker its first U.S. manufacturing facility and a bunch of new products. Cipla's deal was just one of more than 30 that Indian drugmakers have made in the U.S. in the last the 5 years as they seek to get their hands on technology that would be hard to duplicate in India.

Citing Dealogic, Dow Jones Business News reports that Indian drugmakers last year struck $1.5 billion in deals for U.S. operations and have announced or completed 31 deals in the U.S. since 2010.

The rush to buy U.S. manufacturing comes as many of India's largest drugmakers have had the plants that ship to the U.S. crippled after FDA inspections found serious issues with manufacturing quality and data integrity. Warning letters have been issued to Indian plants owned by Sun Pharmaceutical, Dr. Reddy's Laboratories ($RDY) and Wockhardt, as well three owned by Mylan ($MYL). Some companies have had all of their products banned, leaving them with no product sales in the world's richest pharma market.

Among those was an agreement by Mumbai-based Lupin Pharmaceuticals and Glenmark Pharmaceuticals, both of which will get specialized operations here. Lupin last year agreed to pay $900 million to get Gavis Pharmaceuticals and Novel Laboratories, two New Jersey generics companies which will allow Lupin to make generic version of the highly regulated drugs OxyContin and Ritalin. Glenmark is building its own $100-million-plus facility in Monroe, NC, where it will manufacture drugs in prefilled syringes.

Glenmark managing director Glenn Saldanha

Glenn Saldanha, managing director of Glenmark, told Dow Jones that while it will cost the company more to manufacture in the U.S. compared to India, his company can manufacture more sophisticated, higher quality products here. "That is the trade-off," he said.

But manufacturing in the U.S. is no guarantee that there will not be FDA concerns. Mumbai-based Cipla got a 350,000-square-foot manufacturing plant in Long Island, NY, with its $550 million buyout of InvaGen Pharmaceuticals, a Hauppauge, NY-based generics maker with 32 products on the market and 30 in the pipeline. But several months ahead of the announced deal, the FDA issued a Form 483 for several issues at the three-unit InvaGen plant, issues that will now be Cipla's to resolve.

- read the Dow Jones Business News story