Lupin stakes a claim on the sterile injectables market

Yet another generic drug maker is looking to make its mark in sterile injectables. India's Lupin is buying an expert in the field in an effort to break into that market, which has spawned a number of deals in the last year.

The drugmaker said it will buy Netherlands-based Nanomi for an undisclosed sum. CEO Vinita Gupta said in a release that Nanomi's proprietary technology platform will put her company in a position to "make significant inroads into the niche area of complex injectables." The company pointed to Nanomi's "rich talent pool of scientists" as well as its R&D and manufacturing teams as being key to the deal.

The deal follows two weeks after Par Pharmaceuticals' Jan. 21 announcement that it will pay $490 million to pick up JHP Pharmaceuticals, a specialist in manufacturing sterile injectable drugs, which came days after India's Aurobindo said it would buy 7 API plants from Actavis ($ACT), in part to boost its sterile injectables operations.

The margins on sterile injectables had been low and the cost, complexity and regulatory hurdles of making them high. But as a recent report by Guggenheim Securities in Barron's points out, pricing is getting better. Demand is high even as some capacity has been sidelined for remediation after running into FDA concerns. U.S. generic injectable specialist Hospira ($HSP) is among those with plants under an FDA warning letter, but the securities firm has raised its price point on Hospira's stock because of the improving market. It also pointed out that Germany's Boehringer Ingelheim closed up its U.S. sterile injectables plant at the end of the year rather than spend more money to upgrade the aged facility, creating additional opportunity.

- here's the release
- get the Guggenheim Securities report (sub. req.)