Indian CMOs interested in APIs have started expanding as they anticipate a wave of consolidation across the global
As the merger and acquisition (M&A)
activity gathers pace, many Indian players come center stage, either as aggressive
bidders or as hotly pursued targets. Intas
Pharma’s acquisition of Teva’s portfolio
and Baxter’s buy of Claris’injectables business for $625 million are among the most
recent examples to illustrate the trend.
API suppliers, often considered the
backbone of the industry, are eager to
catch up with this emerging scenario. Apparently, contract manufacturing organizations (CMOs) are readying themselves
for the unfolding opportunities by way of
beefing up capacities and bridging technology gaps through M&A.
Aurobindo, one of the top API makers in the world, announced the acquisition of Portugal’s Generis Farmaceu-tica SA from Magnum Capital Partners
in January. Generis currently has the
largest portfolio in Portugal comprising
200 molecules, according to the company website. Post-merger, Generis and
Aurobindo together will have a total
portfolio of 271 products in the European nation. Generis also manufactures
finished dosage forms for an extensive
list of clientele with facilities dedicated
for the purpose.
Aurobindo markets a large variety of formulations across different therapeutic areas,
and offers chemistry services as well, through
AuroSource, the company’s custom research
and manufacturing arm. The Hyderabad-based firm acquired Actavis’ commercial operations in 2014, expanding in EU.
Strides Shasun, in December last year,
entered a definitive agreement with Perrigo API India to acquire a facility located at Ambernath, in the western Indian
state of Maharashtra. Having a potential
capacity of 600 tons per year, the Perrigo
factory holds U.S. FDA approval for products. Israel-based Perrigo API produces
finished dosages too, beside APIs.
The Strides deal allows Perrigo to continue to source products from the facility
under a long-term supply agreement. The
company said it would transfer all the integrated DMFs filed for captive consumption
to the acquired facility.
Strides is a source of APIs such as ibuprofen, ranitidine and gabapentin. The company has two manufacturing facilities in India
and the UK. To bolster its API division, the
Bengaluru-based firm restructured the business into a separate pharma services and active ingredients (PSAI) unit in August 2016.
The move followed its merger with Shasun
Pharmaceuticals, a rival firm with strengths
in APIs, two years back. The API segment
contributed nearly a third of the company’s
total revenues in 2015-16, according to its
“With this acquisition, we bring into our
fold a manufacturing facility designed to
handle multipurpose small batch productions and accelerates our time to market,”
the company said in a stock exchange filing.
In August, Piramal Pharma Solutions
of Mumbai added its third facility in North
America with the acquisition of Ash Ste-
vens. The $42.95 million asset not only
expands the Indian contract service pro-
vider’s portfolio of offerings but also lends
it a clear edge on the sought-after skills in
high potency APIs. The U.S.-based Ash
Stevens owns 12 FDA approvals for inno-
vator small molecule APIs and pipeline of
products at various stages of development.
Piramal Enterprises, the flagship company, started focusing on custom manufacturing after selling off the company’s
entire pharmaceutical formulations business to Abbott in 2010.
The contract development and manufacturing organization (CDMO) claims differentiated expertise to manufacture high potency
compounds. The company recently unveiled
plans to make additional investments to expand its manufacturing facilities at Lexington, KY, including a high speed vial filling
machine for handling potent materials.
Piramal also runs accredited manufacturing facilities in Europe and Asia providing
drug discovery and development to manufacturing of APIs and finished dosages. The
CDMO is reportedly looking for more acquisitions to achieve the required scale.
Scaling up of capacities to meet the
growing demand from the international
markets was, again, the stated goal for
Torrent’s buy of Glochem’s API unit. Torrent Pharma bought the API factory from
Hyderabad-based Glochem Industries
along with a few DMFs in June last year.
Located in South India, the acquired
factory makes advanced intermediates and
APIs. The multi-product facility received
clearances from the U.S. and EU regulators
and includes development and analytical
method development, with a quality control lab and pilot plant. The Vizag plant will
become the third API facility for Torrent.
Moving forward, analysts forecast M&A is
likely to continue as firms look to enhance
capabilities and cross-border expansion. CP
API Makers Speed Expansion
CMOs chart course through M&A route
S. Harachand is a pharmaceutical journalist based in Mumbai. He can be reached at