Dr Reddy's Laboratories Ltd said on Saturday it has agreed to buy eight generic drugs in the US from Teva Pharmaceutical and Allergan Plc for $350 million (around Rs 2,350 crore) in cash.

The combined sales of the branded versions of the products in the US is around $3.5 billion, the Hyderabad-based drugmaker said in a stock-exchange filing.

"This transaction will add strength to our product portfolio, help us be more relevant in the US market and also create new opportunities for growth," GV Prasad, co-chairman and CEO of Dr Reddy's Laboratories said.

The portfolio being acquired is a mix of filed abbreviated new drug applications (ANDAs) pending approval and an approved ANDA and comprises complex generic products across diverse dosage forms, Dr Reddy's said.

The generic drugs being acquired are part of the portfolio that Teva is selling to complete its $40 billion acquisition of Allergan. The acquisition of these ANDAs is contingent on the closing of the Teva-Allergan generics transaction and approval by the US Federal Trade Commission of Dr Reddy's as a buyer, the Indian company said.

Dr Reddy's is acquiring the portfolio on a cash-free, debt-free basis and expects to finance the transaction using a combination of cash on hand and available borrowings under existing credit facilities, the company said.

Previous deals

The deal for Teva and Allergan generic drugs comes barely weeks after Dr Reddy’s said in May that it acquired a portfolio of half a dozen over-the-counter (OTC) drug brands from American drugmaker Ducere Pharma to enter the branded consumer health business in the US. The twin deals will help the drugmaker expand its US business, which is already its largest overseas market.

Alok Sonig, executive vice president and head of North America at Dr Reddy’s, said the company has 79 ANDAs pending approval in the US, of which 18 have first-to-file status. The acquisition of Teva and Allergan products will “enhance our short- to mid-term aspirations and is consistent with our growth initiatives to identify inorganic opportunities to expand our base business,” he said.

The latest deal is much larger than the $128 million transaction Dr Reddy’s announced in April last year to acquire a portfolio of established brands of Belgium-based pharmaceutical firm UCB in India, Nepal, Sri Lanka and Maldives. It is also the largest acquisition by Dr Reddy’s since its $570 million takeover of Germany’s Betapharm in 2006.

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