Lupin sells off Japanese operation to tidy up its balance sheet 

Lupin headquarters
India's Lupin has sold off the remaining portion of its Kyowa Pharmaceutical Industry Co., to a Japan private investment group netting about $300 million on the deal. (Lupin)

Even as other drugmakers are making big plays for business in Japan, India’s Lupin is backing off. Just weeks after selling the sterile manufacturing assets of its Kyowa operation, it has now unloaded the rest of Kyowato a private equity investor.

Lupin today announced it will sell Kyowa Pharmaceutical Industry Co. to Japanese private equity fund Unison for ¥57.4 billion ($526 million) and expects to net about ¥32.6 billion ($300 million) on the deal. Lupin acquired the business in 2007 for about $60 million 

The deal includes manufacturing facilities in Sanda and Tottori, Japan and a R&D center at Osaka, Lupin said. 

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RELATED: Neopharma snaps up Lupin's sterile injectables business in Japan

“This transaction is aligned with our vision to focus on our key markets and strategic priorities to achieve sustainable growth in the mid to long-term,” Lupin CEO Vinita Gupta said in a statement. “The deal proceeds will be utilized to strengthen Lupin’s balance sheet as well as provide growth capital to support organic and inorganic initiatives for our focus markets.”

The operation makes a variety of generic products but Lupin said it is particularly strong in the “central nervous system/neurology space.” With about $260 million in sales in fiscal 2019, Lupin said the Kyowa operations ranks fifth in the Japanese generic market.

RELATED: Novartis' Sandoz, still working on U.S. slim-down, bets on Japan with Aspen deal

This deal comes three months after Lupin sold the sterile injectables plant and portfolio of Kyowa to Abu Dhabi-based Neopharma for an undisclosed sum. It also comes as Lupin has been dealing with FDA concerns over some of its manufacturing that will likely require investments. The FDA in September issued a warning letter for Lupin’s finished dose plant in Mandideep, India.  

The Lupin Kyowa deal is actually part of a Japan M&A double feature. Novartis’ Sandoz unit announced it is buying the Japanese operations of South Africa’s Aspen Pharmacare for up to €400 million. In that case, Aspen will continue to manufacture drugs for Sandoz for up to seven years. That deal comes as Novartis has yet to complete a $1 billion sale of some plants and a portfolio of 300 drugs to India's Aurobindo as it tries to remake its exposure in the difficult U.S. generics market. 

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