Jan 09, 2017 03:17 PM IST IST | Source: Moneycontrol.com

Aurobindo gains 5% on acquisition of Portuguese firm, USFDA nod

Aurobindo Pharma shares climbed nearly 5 percent after its subsidiary acquired Portugal-based healthcare company for 135 million euro and it has received final approval from the USFDA to manufacture and market Levetiracetam.

Moneycontrol Bureau

Aurobindo Pharma shares climbed nearly 5 percent after its subsidiary acquired Portugal-based healthcare company for 135 million euro.

The acquisition included manufacturing facility in Amadora, Portugal, which has capacity to manufacture 1.2 billion tablets / capsules / sachets annually.

"The wholly owned step-down subsidiary, Agile Pharma BV Netherlands has signed a binding agreement to acquire Generis Farmaceutica SA from Magnum Capital Partners," the Hyderabad-based pharma company said in its filing.

This deal consolidates Aurobindo's footprint in Portugal, which currently consists of Aurovitas, Unipessoal LDA and Aurobindo Pharma (Portugal), Unipessoal Limitada.

With this acquisition, the company will have its first formulations plant in European Union. Existing plant capacity is at around 50 percent and provides ample room for growth, Motilal Oswal feels.

The management estimates that net sales for the acquired business will be approximately 72 million euro in 2017 compared with 64.8 million in 2016.

"The combined entity will benefit from a robust pipeline covering all major molecules coming off-patent in the next five years," V Muralidharan, SVP of European operations at Aurobindo said.

Post completion of this acquisition, Aurobindo will become number 1 player in Portugal market and becomes part of the top-10 generic company in European Union (from No 13 earlier), Motilal Oswal said.

Portugal has pharma market size of 3.4 billion euro with generic penetration in volume at around 30 percent significantly below EU average of around 53 percent and US average of around 80 percent.

Aurobindo expects synergy benefits of 2 million euro and 5 million euro in 2018 and 2019, respectively (and expected to improve further). This will be primarily driven by new product portfolio launch, market leadership status and improvement in capacity utilisation.

Meanwhile, Aurobindo Pharma has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Levetiracetam in sodium chloride injection, 500 mg/100 mL (5 mg/mL), 1000 mg/100 mL (10 mg/mL), and 1500 mg/100 mL (15 mg/mL) (Single-use bags).

Levetiracetam is a generic equivalent of HQ Specialty Pharma Corp's Levetiracetam in sodium chloride injection. The product will be launched in January 2017, Aurobindo said.

Levetiracetam is a CNS drug and indicated for partial onset seizures in adults (16 years and older) with epilepsy; myoclonic seizures in adults with juvenile myoclonic epilepsy; primary generalized tonic-clonic seizures in adults with idiopathic generalized epilepsy.

The approved product has an estimated market size of USD 32 million for the twelve months ending November 2016, according to IMS.

Aurobindo now has a total of 304 ANDA approvals (263 final approvals including 16 from Aurolife Pharma LLC and 41 tentative approvals) from USFDA.

At 13:05 hours IST, the stock was quoting at Rs 699.00, up Rs 6.25, or 0.90 percent on the BSE.

Posted by Sunil Shankar Matkar

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