Two large Indian suppliers of generic medicines in the U.S. and beyond are at the center of the industry's M&A rumor mill this week.
Torrent Pharmaceutical is in preliminary discussions with Apollo Global Management to lock down a loan of up to $1 billion to help fund its planned bid for Cipla, Reuters reports, citing "people briefed on the discussions."
In total, the company is looking to secure financing of approximately $3 billion to $4 billion for the deal, according to the report.
Taking over about 60% of Cipla, India’s third leading drugmaker, could cost as much as $7 billion, Reuters reports, citing Bernstein analysts. That would make this potential deal the largest Indian biopharma acquisition to date, according to the news service.
But Torrent could have competition in Blackstone, which is reportedly also interested in a bid.
Cipla currently has a market cap of around $12 billion, according to the report. The company's founding family is pursuing a potential sale of its stake, which would open up other shares for offers.
Meanwhile, both of the Indian drugmakers are frequent recipients of FDA manufacturing scrutiny.
Torrent, for this part, started off this year with a letter of reprimand from the FDA after the agency inspected its Indrad manufacturing plant in September, resulting in a scathing 15-page Form 483. During the inspection, inspectors determined that the facility’s cleaning process was substandard.
Cipla, too, has had its fair share of FDA dings. In February, FDA inspectors delved into more than 3,000 complaints levied at the drugmaker over two years and found that the company failed to evaluate the complaints or take action to reduce the number of complaints.