Lupin to acquire 21 branded drugs from Japan’s Shionogi for $150 mn

Indian drugmaker Lupin Ltd has agreed to purchase 21 branded drugs from Japan's Shionogi & Co. Ltd for 15.4 billion yen (about $150 million) to expand in the world's second-largest pharmaceutical market.

The 21 products had annual sales of $90 million collectively, the two companies said in separate statements. The drugs cover therapy areas such as central nervous system (CNS), oncology, cardiovascular and anti-infectives.

The company said the deal will help its Japanese subsidiary, Kyowa Pharmaceutical Industry Co. Ltd, become the sixth-largest generic drugmaker in the country. Kyowa is currently among the top 10, it said.

“This acquisition marks Lupin’s foray into the Japanese branded market in line with our aspirations to strengthen our specialty business globally. The new branded product portfolio has a strong fit with Lupin’s Kyowa business, as it adds depth to its current CNS portfolio and other therapy areas,” said Lupin managing director Nilesh Gupta. 

Isao Teshirogi, president and CEO of Shionogi, said the transaction would allow Shionogi to “pursue innovative drug discovery with more focus,” Shinogi’s current focus area includes infectious diseases and pain/CNS disorders.

The deal would be effective December 1, 2016, subject to regulatory approvals, the company said.   

Other Indian pharmaceuticals companies have also been trying to increase their Japanese footprint in an attempt to cater to the country’s ageing population. In March 2016, Sun Pharmaceuticals acquired 14 prescription drugs from Novartis in Japan for $293 million.

However, in Japan, Lupin has a head start – it acquired a control stake in Japan’s Kyowa in 2007 and its Japanese business now contributes 10% revenue to the firm’s turnover, it said.

In the last one year, Lupin has been on a buying spree, using acquisitions to enter new markets and deepen its existing reach. It acquired US-based Gavis Pharmaceuticals for $880 million in July 2015 after buying a specialty product portfolio of Germany’s Temmler Pharma for an undisclosed sum.

The same month, it also acquired Russian company Biocon for $60 million. In May 2015, it acquired the balance 40% stake in South African generics drug company Pharma Dynamics (PD) in which it had initially acquired a majority stake in 2008 .

In 2014, it bought Laboratorios Grin S.A. De C.V, to enter the Mexican and the larger Latin American pharmaceuticals market and purchased Dutch firm Nanomi B.V to manufacture complex injectables with innovative drug delivery systems.  

Lupin secured a board approval in mid-2015 to raise upto Rs 7,500 crore ($1.17 billion) through sale of equity shares or other equity linked approvals with a view to building its war chest for acquisitions.

For the financial year ended March 2016, Lupin's consolidated turnover was Rs 13,701 crore ($2.09 billion) and it reported a PAT of Rs 2,270 crore ($347 million).

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