Drugmaker Dr Reddy's Laboratories Ltd on Monday said it has entered into a definitive agreement to sell its active pharmaceutical ingredient (API) plant in Hyderabad to Indian generics pharma company Therapiva Pvt Ltd.
The sale of the unit is part of the company's plan to streamline manufacturing and reduce costs, said Sanjay Sharma, executive vice-president and head of global manufacturing, Dr Reddy's. Financial details of the deal were not disclosed.
The buyer Therapiva is a joint venture between Omnicare Drugs India Pvt Ltd, which is a 100% subsidiary of Abu Dhabi-based Neopharma LLC, and Laxai Life Sciences Pvt Ltd.
BR Shetty, chairman of Neopharma, said that the acquisition of Dr Reddy's unit will boost the UAE (United Arab Emirates) firm’s vertical integration advantage and provide the company with a manufacturing base in India.
"This is a key milestone in our acquisition strategy over the next few years to increase Neopharma's presence in the global generics space," added Shetty.
Notably, earlier this month, Dr Reddy's said it had sold its antibiotic manufacturing facility in the US to Neopharma.
Dr Reddy's makes APIs, generics, biosimilars and differentiated formulations. It also provides custom pharmaceutical services. Its major therapeutic areas of focus are gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology.
The company’s consolidated revenue from operations stood at Rs 14,281 crore for the year through March 2018, up from Rs 14,196 crore the previous year.
The API sector has witnessed some activity in the past months.
Earlier in August, Glenmark, backed by Singapore state investment firm Temasek, decided to hive off its API business into a wholly-owned subsidiary, Glenmark Life Sciences. This business had revenue of Rs 877.9 crore for the year ended March 2018. Previously, reports had said, citing unidentified people, that private equity firm True North was set to buy a stake in Glenmark's API business.