Strides and Shasun merger aims to spread risk

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Strides and Shasun merger aims to spread risk

INICIO/Noticias Farmacéuticas | Posted 03/10/2014 0 Post your comment

In the current climate of increasing scrutiny against Indian generics manufacturers by the US Food and Drug Administration (FDA), Indian generics maker Strides Arcolab (Strides) and India-based active pharmaceutical ingredient (API) maker Shasun Pharmaceuticals (Shasun) have announced a ‘risk-spreading’ merger.

The two companies announced on 29 September 2014 that the plan for the merger had been approved by their respective Board of Directors.

Import bans from FDA have highlighted the need for companies to have multiple manufacturing sites and not rely on a single facility. The merger between Strides and Shasun will enable a ‘significant de-risking of operations’ with the merged company spreading its operations over 12 manufacturing facilities, six of which have FDA approval. The companies plan to use the other six manufacturing facilities to cater to emerging markets.

The merger will also create a top 15 listed Indian pharmaceutical company by revenue with a pipeline of over 100 products.

This latest merger joins a long line of mergers and acquisitions amongst generics makers in the last years. The most notable acquisition in recent years has been Watson’s purchase of Actavis in April 2012, making it the world’s third-largest generics company [1]. This was then followed by its acquisition of Irish drugmaker Warner Chilcott in May 2013 [2] and US-based Forest Laboratories in February 2014 [3]. Other notable mergers and acquisitions include US-based generics maker Perrigo Company’s acquisition of Irish biotechnology company Elan Corporation in July 2013 [4] and the acquisition of a controlling stake in Israel generics’ firm Taro Pharmaceuticals by Sun Pharmaceutical Industries [5].

Such mergers are predicted to increase as consolidation of the generics industry takes place as a consequence of the reduced number of originator drugs losing patent protection in the coming years. However, some believe this consolidation is already leading to increases in the prices of generics as fewer companies complete.

References
1.   GaBI Online - Generics and Biosimilars Initiative. Watson now third largest generics company with Actavis acquisition [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2014 Oct 3]. Available from: www.gabionline.net/Generics/News/Watson-now-third-largest-generics-company-with-Actavis-acquisition
2.   GaBI Online - Generics and Biosimilars Initiative. Actavis makes definitive agreement with Warner Chilcott [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2014 Oct 3]. Available from: www.gabionline.net/Pharma-News/Actavis-makes-definitive-agreement-with-Warner-Chilcott
3.   GaBI Online - Generics and Biosimilars Initiative. Actavis to acquire specialty drugmaker Forest Labs [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2014 Oct 3]. Available from: www.gabionline.net/Pharma-News/Actavis-to-acquire-specialty-drugmaker-Forest-Labs
4.   GaBI Online - Generics and Biosimilars Initiative. Perrigo expands global ambitions with Elan buy [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2014 Oct 3]. Available from: www.gabionline.net/Pharma-News/Perrigo-expands-global-ambitions-with-Elan-buy
5.   GaBI Online - Generics and Biosimilars Initiative. Sun Pharma finally gains full control of Taro [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2014 Oct 3]. Available from: www.gabionline.net/Pharma-News/Sun-Pharma-finally-gains-full-control-of-Taro

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Source: Strides Arcolab