Lupin finishes Gavis buy, giving it U.S. manufacturing beachhead

Courtesy of Gavis

Gaining a foothold in the U.S., Lupin announced on Wednesday the completion of its $900 million Gavis Pharmaceuticals purchase. The deal gives India's Lupin its first U.S. manufacturing facility and a U.S.-based manufacturing and research organization, and it broadens the company's portfolio to more than 120 marketed products.

Gavis, a New Jersey company founded in 2009, brings to Lupin a 45,000-square-foot manufacturing and R&D site as well as a 124,000-square-foot packaging and distribution operation in that state. Specializing in niche products including dermatology and controlled substances, the company has 62 ANDA filings submitted at the FDA in markets worth more than $9 billion.

Lupin and Gavis struck the all-cash deal last July, leaving the Indian pharma last month to part ways with two generic drugs to secure regulatory approval. Lupin sold the rights and assets to New Jersey-based G&W Laboratories.

Lupin, which says it's the fastest-growing top 10 U.S. generics company, is one of several Indian drugmakers that have recently looked to M&A to gain a foothold in the world's largest pharma market. According to Dealogic figures reported by Dow Jones Business News, Indian pharma companies laid out $1.5 billion in M&A last year for U.S. operations and have completed 31 deals since 2010.

Among those investing in the U.S. are Glenmark and Cipla, though Cipla's recently closed deal will not come without some hassle. After agreeing to pay $550 million for InvaGen Pharmaceuticals and a 350,000-square-foot plant in Long Island, NY, the FDA issued a Form 483 for the plant on three issues that will now be Cipla's to resolve. Glenmark, for its part, is setting up a $100-million-plus plant in Monroe, NC, to produce drugs in prefilled syringes.

The trend comes as many Indian drugmakers large and small have felt the sting of regulatory punishments over substandard manufacturing practices at sites in India. The FDA has issued warning letters to big-name Indian pharma companies such as Sun Pharmaceutical Industries, Dr. Reddy's Laboratories ($RDY), Wockhardt, and for three plants there owned by Mylan ($MYL). Indian pharma has seen exports plunge as the companies seek to get back in regulators' good graces.

- here's the release