Mylan ($MYL) has boosted manufacturing in India significantly in the 7 years it has been a player there, and wants Indian authorities to understand that much of its further expansion of production will be focused on the Indian market. In fact, if its deal to buy Agila Specialties closes, it says it expects to become the largest manufacturer of sterile injectable drugs for the domestic market there.
The Pittsburgh, PA-based Mylan announced the $1.6 billion deal to buy Strides Arcolab's sterile injectables unit in February, but last month there were reports that the country's Department of Industrial Policy and Promotion (DIPP)--which must approve the deal--might be less than predisposed to it. Officials were worried about whether India's market would be slighted if Mylan gets that business. Its concerns included whether Mylan would shut down a plant that manufacturers cancer drugs for India. In a filing with DIPP, Mylan made clear it only expects to expand its operations in and for the Indian market, according to The Financial Express. It said its plans call for boosting Agila's capacity from 180 million units annually sold in India to 600 million units by 2017.
It is not like the company is a slouch in India currently. Mylan told DIPP its employment numbers have expanded fourfold since it entered the market in 2006 with its $736-million takeover of Matrix Laboratories. Nearly half of its global workforce of 20,000 currently work in India. It has 8 plants in India making active pharmaceutical ingredients (APIs) and two R&D plants in Hyderabad. The company told DIPP that it has invested Rs 3,800 crore (about $621 million) in its manufacturing facilities over the 7 years.
If the Agila deal closes, Mylan will get even more manufacturing capacity in India, as well as around the world. Agila has 9 manufacturing facilities in India, Brazil and Poland, 8 of which have been approved by the FDA. Its products include vials, prefilled syringes, ampoules, lyophilization, cytotoxics, and antibiotics. Strides has one of the the largest capacities for sterile injectables in India and one of the largest freeze-drying capacities in the world. Further, Mylan already had a sterile manufacturing plant in India, as well as one in Ireland.
Mylan has pointed to the growing sterile injectables business globally, citing compound growth of 13% through 2017, as the motivation for buying the Agila business from Bangalore-based Strides Arcolabs. The combined operations will have more than 700 injectable products and a pipeline of 350 more. The deal was expected to close in the fourth quarter of 2013.
- here's the Financial Express story