Aurobindo Pharma is already a generics force to be reckoned with in the U.S. Now, the company has clinched a deal to tap into the burgeoning biosimilars market in its home country of India.
Aurobindo is buying (PDF) compatriot Veritaz’s domestic formulations business for 171 crore Indian rupees ($22.6 million), with the goal to establish a “launch pad for marketing biosimilar and other products in India,” the company said in a disclosure Monday.
The deal is being made at an “arms-length price” to supplement Aurobindo’s ambition to break into the Indian formulation business, the company added.
The acquisition will take effect April 1, with the companies hoping to seal the pact no later than May 31, 2022.
Veritaz debuted in 2006, holds around 180 trademarks and markets 40 products across its two bread-and-butter fields of anti-infective and pain management meds. In 2021, the company reeled in 1.27 billion rupees (about $16.8 million) in sales, Aurobindo pointed out. For the nine-month period ended Dec. 31, Veritaz tallied revenues of 1.33 billion rupees ($17.6 million).
The current market for Veritaz's products is worth some 267.8 billion rupees ($3.54 billion). Veritaz’s employee headcount clocks in at more than 900, 700 of whom are sales reps, Aurobindo said.
Aurobindo doesn't expect to have too much trouble folding Veritaz’s business into its current operations. The company flagged that Veritaz’s “significant” brands are in pain-management and anti-infectives, where Aurobindo says it already has a solid product portfolio. Veritaz also has a pipeline of therapies in the cardio-diabetic, ortho and gynecology arenas, the Economic Times pointed out.
“[W]ith this acquisition we strongly believe that with Aurobindo’s ability to build a product portfolio, and with the existing and expanding distribution network of Veritaz, we will be able to create a significant footprint in the domestic pharma market over the next few years,” said K. Nithyananda Reddy, managing director of Aurobindo, as quoted by The Times of India.
Aurobindo’s Indian manufacturing deal comes amid regulatory turbulence with the U.S., where the company recently recalled a batch of antibiotics after a complaint flagged the presence of a hair in a vial of the drug. Meanwhile, the U.S. FDA in January published a warning letter it slapped on Aurobindo’s Telangana, Hyderabad, India, facility following an inspection last August.
In its rebuke, the FDA said it had raised similar production violations with the company in 2019, arguing that “repeated failures demonstrate that executive management oversight and control over the manufacture of drugs is inadequate.”
Separately, Aurobindo last week said it was mothballing its Aurolife Pharma unit in Dayton, New Jersey, putting 99 jobs on the chopping block.
The Garden State facility was in the FDA’s crosshairs as recently as October 2020, when the regulator issued a warning letter for a raft of issues at the New Jersey plant including water leaks and impurity concerns tied to drug ingredients for a generic antipsychotic medicine.