Alkem Laboratories Ltd is set to acquire assets related to active pharmaceutical ingredient (API) Dronabinol from United States-based AbbVie Inc. for a cash consideration of $10 million (around Rs 71 crore at current exchange rate).
In a filing with stock exchanges, Mumbai-based Alkem said that the acquisition will help the company to commercially leverage the assets relating to Dronabinol for the sale of both branded and generic drugs in the US.
The proposed acquisition includes Dronabinol assets such as domain names and trademarks related to a drug, Marinol, as well as logos, patents, designs, knowledge, technical and manufacturing instructions, inventory, manufacturing equipment and other items.
Alkem says that it expects to close the transaction by the end of the year, and that the cash consideration of $10 million is subject to suitable working capital adjustments. Shares of the company were trading 1.71% higher at Rs 2,023.50 apiece at the time of writing this report.
The pharmaceutical company was founded in 1973, and was listed on Indian stock exchanges in 2015. It says that it has 21 manufacturing facilities across India and the US, and that its capabilities include generic and proprietary drugs, APIs, as well as differentiated products.
It reported consolidated net sales of Rs 5,687.5 crore, Rs 6,421.85 crore and Rs 7,357.19 crore for 2017, 2018 and 2019 financial years. The company posted profits of Rs 904.67 crore, Rs 638.42 crore and Rs 773.64 crore for the respective periods.
Chicago-based AbbVie, which began operations as a spinoff of Abbott Laboratories, acquired Botox maker Allergan for around $64 billion earlier this year. Its focus areas include immunology, oncology, neuroscience, virology and general medicine.
The proposed acquisition of Dronabinol by Alkem is the latest example of the API shopping by Indian firms. Reasons for this push include adding to a company’s product and intellectual property portfolio as well as increasing market presence, and research and development efforts.
For example, in April, ChrysCapital-backed Ipca Laboratories Ltd said that it would acquire Ramdev Chemical Pvt. Ltd for Rs 108.5 crore (around $15.5 million) in a cash deal aimed at growing its API business. Similarly, in February last year, SMS Lifesciences India Ltd announced the acquisition of API manufacturer Mahi Drugs Pvt. Ltd.