Zydus Cadila injects $16M into injectables

Another generic drugmaker sees enough promise in the U.S. market for sterile injectable drugs to invest in a new manufacturing plant that will target that market.

A Zydus Cadila executive said the drugmaker already has the land in the city of Vadodara, not far from its base in Ahmedabad. It intends to invest about Rs 100 crore, $15.8. million by current exchange rates, to build an FDA-approved plant by 2015. "We are coming up with a USFDA-approved injectible facility at Vadodara to cater to the high-value U.S. market. Regulated markets like Brazil and Europe would be the next focus," COO Ganesh Nayak told The Economic Times.

Nayak made clear that the new facility will not manufacture oncology drugs. That is because Zydus Cadila and U.S.-based Hospira ($HSP) have a 50-50 joint venture to manufacture anticancer drugs at a plant near Ahmedabad. That joint venture was initiated in 2011 and continues through 2015, according to Hospira's last quarterly report.

This new Zydus Cadila plant will add to a growing global supply of sterile injectable production. India's Aurobindo Pharma last week indicated it has plans to nearly quadruple capacity at a plant near Hyderabad, as well as make a 60% investment in a new plant that Celon Laboratories is building to make hormonal and oncology drugs. Teva Pharmaceutical Industries ($TEVA) last year expanded its injectables capacity at a plant in Hungary, while Hospira ($HSP) has made plants in the U.S. more efficient but also bought a modern API plant in India to feed its operations.

Of course, the big kahuna in the sterile injectables business will soon be Mylan ($MYL). It is buying Agila Specialties, the sterile injectables business of India's Strides Arcolab, for $1.6 billion and says it intends to expand its capacity.

- here's the Economic Times story