Dr Reddy's To Buy Eight Products In US For $350 Million

India's second laregst drug maker Dr Reddy's Laboratories Ltd (DRL) has said on Saturday (11th June) that it has entered into a definitive agreement with Teva Pharmaceutical Industries Ltd and an affiliate of Allergan plc to acquire a portfolio of eight new generic drug filings (Abbreviated New Drug Applications (ANDAs) in the US for $350 million in cash at closing.

The acquired portfolio consists of products that are being divested by Teva, the world's largest generic drug maker, as a precondition to its closing of the acquisition of Allergan’s generics business. The acquisition of these ANDAs is also contingent on the closing of the Teva/Allergan generics transaction and approval by the US Federal Trade Commission of Dr Reddy’s as a buyer.

An ANDA is an application filed by pharmaceutical companies seeking approval for selling a newly developed generic drug in the US market.

The portfolio being acquired is a mix of filed ANDAs pending approval and an approved ANDA, and comprised of complex generic products across diverse dosage forms. The combined sales of the branded versions of the products in the US is approximately $3.5 billion MAT for the most recent twelve months ending in April 2016 according to pharmaceutical market researcher IMS Health.

“This transaction will add strength to our product portfolio, help us be more relevant in our U.S. market and also create new opportunities for growth,” G.V. Prasad, co-chairman and CEO of Dr. Reddy’s Laboratories.

While, Alok Sonig, Executive Vice president and Head of North America added that Dr. Reddy’s Laboratories has a strong track record in the US market with over 79 filed ANDAs pending approval, of which we believe 18 have first-to-file status.

"The acquisition of these attractive ANDAs from Teva will enhance our short-to-midterm aspirations and is consistent with our growth initiatives to identify inorganic opportunities to expand our base business,” Sonig said.

Dr. Reddy’s Laboratories said in a Saturday release that it is acquiring the portfolio on a cash-free, debt-free basis and expects to finance the transaction using a combination of cash on hand and available borrowings under existing credit facilities.