Lupin readies for a mega specialty drug play with $1-bn war chest
Lupin on Wednesday has agreed to buy US-based Symbiomix Therapeutics for USD 150 million. The drug maker will be doing several deals in the coming quarters.
Lupin, India’s second largest drug maker by sales, said its balance sheet allows it to leverage up to one billion dollars as war chest for acquisitions as it aspires to build a specialty branded business in US focusing on women’s health.
“We have the capacity to lever our balance sheet up to a billion dollars, but that doesn't necessarily mean that we are going to spend one billion dollars in one single tranche, it is obviously going to be spread across several tranches,” said Ramesh Swaminathan, Chief Financial Officer of Lupin.
Lupin on Wednesday said it has agreed to buy US-based Symbiomix Therapeutics for USD 150 million. The acquisition gives Lupin control over Symbiomix’s lead product, Solosec oral granules, for the treatment of bacterial vaginosis in adult women. In September, the USFDA approved marketing of Solosec with 10-year exclusivity.
The Mumbai-based drug maker said it will be doing several such deals in the coming quarters.
“Our sweet spot is going to be USD 150-200 million range,” Lupin’s Swaminathan said.
“In women’s health, now that we have two products Methergine as well as Solosec, it makes lot of sense to get additional women health products,” Vinita Gupta, Chief Executive Officer of Lupin.
Methergine tablets used in controlling postpartum hemorrhage was part of the Gavis portfolio, which Lupin acquired for USD 880 million in 2016.
“We have the infrastructure in place, we will be expanding commercial infrastructure for Solosec, getting additional products to that infrastructure enables us to create critical mass,” Gupta added.
Lupin statement comes at a time when Israeli-based Teva is looking to offload its women’s health business.
Last month, Reuters reported that Teva would sell the remaining assets in its specialty women's health business for USD 1.38 billion in two separate transactions.
Teva will use proceeds from these sales to repay debt.
An analyst who didn’t want to be named told Moneycontrol that Lupin could be in race to buy those assets, as they fit their specialty game plan.
Lupin couldn’t be reached for a comment.
Lupin earlier said in addition to women’s health it’s also looking at building pipeline for pediatrics and neurology. Lupin along with its other rival large Indian drug makers, such as Sun Pharma and Dr Reddy’s faced with rising competition and pricing pressures in US market, are investing more money on acquiring and developing specialty drugs.
Specialty drugs are prescription drugs that are difficult to make and require special handling. Typically, specialty drugs have limited distribution and targeting narrow group of chronic diseases. Specialty drugs constituted a third of US prescription spending of USD 374 billion in 2015.Shares of Lupin rose 1.37 percent to close at Rs 1059.80 on BSE, the benchmark Sensex gained 1.09 percent to end 32,182.22 points.