<div><em>Acquisition to help Lupin scale up in the US generic market and broaden the product pipeline, says <strong>C H Unnikrishnan</strong></em><br><br><br>Drug maker Lupin Ltd said on Thursday (23 July) that it will acquire New Jersey-based generic drug maker and drug researcher GAVIS Pharmaceuticals LLC and Novel Laboratories Inc for about $880 million (Rs 5,000 crore). Lupin, which posted a decline in sales and net profit for the quarter ended June 30, said this acquisition will help it scale up in the US generic market and broaden the product pipeline in dermatology, controlled substance products and other high-value and niche generics. </div><div> </div><div>For the June quarter, Lupin posted a 17 per cent drop in net profit at Rs 525 crore for the quarter as compared to the year-ago quarter's Rs 625 crore. This drop in profit was mainly due to fall in sales in the US market. Its sales decreased to Rs 3226 crore in the June quarter from Rs 3370 crore a year ago. </div><div> </div><div>“Slowdown in approvals in the US dampened growth during the quarter, even as the company continues to improve on gross margins," said Nilesh Gupta, managing director. </div><div> </div><div>"(But) we remain focused on evolving our research pipeline, ensuring compliance, operational excellence and acquiring meaningful assets,” he added. </div><div> </div><div>The acquisition in the US will bring to Lupin a highly skilled US-based research organisation which would complement its US inhalation drugs research facility based in Florida. GAVIS’s manufacturing facility will become Lupin’s first manufacturing site in the US. GAVIS is currently a privately held drug maker, which is specialised in formulation development, manufacturing and distribution of generic medicines. </div><div> </div><div>GAVIS had a sales of $96 million in financial year 2014 and currently employs some 250 people. It also has some 66 new products in the approval stage and a pipeline of at least 65 products under development. The acquisition creates the 5th largest portfolio of drug approval filings for Lupin with the US FDA, addressing a total market worth $63.8 billion.</div><div> </div><div>"This is a pivotal acquisition for Lupin as it aligns with our goal to expand and deepen our US presence," said Lupin's cheif executive officer Vinita Gupta.</div><div> </div><div>"GAVIS has a strong track record of delivering highly differentiated products in a short time and is poised for continued strong growth as it delivers on its existing pipeline. Its capabilities and pipeline are an excellent complement to Lupin," she said.</div><div> </div><div>According to Vinita Gupta, since the acquisition also accelerates Lupin’s entry into niche areas like controlled substances and dermatology, the company is confident that its proven commercialisation capabilities, vertically integrated manufacturing operations and supply chain strengths will accelerate GAVIS’s growth. </div><div> </div><div>"The acquisition is expected to be accretive to the earnings from the first full year of operations. In addition to the compelling strategic fit, there is a strong cultural fit between GAVIS and Lupin’s entrepreneurial spirit and values,” she added </div><div> </div><div> “This is a time of globalization for the specialty pharmaceutical industry and GAVIS is well positioned to capitalize on this exciting opportunity," says Gavis's founder and chief executive officer Veerappan Subramanian.</div><div> </div><div>Joining forces with Lupin will help realise our vision of building a broader, research-based high value, specialty business through organic growth, he said. </div>
