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PE-backed Claris to sell injectables unit to Baxter for $625 mn

15 December, 2016

Claris Lifesciences Ltd has agreed to sell its injectables unit to Baxter International Inc. for $625 million (Rs 4,238 crore), the two companies said on Thursday.

The proposed acquisition of Claris Injectables Ltd is likely to close in the second half of 2017, New York-listed Baxter said in a statement. 

It added that Claris Injectables will add proven capabilities in production of essential generic injectable medicines, such as anesthesia and analgesics, renal, anti-infectives and critical care in a variety of presentations including bags, vials and ampoules.

Claris Injectables, based in Ahmedabad, is a generic injectables pharmaceutical company. Its acquisition will provide Baxter with a pipeline and marketed portfolio of generic injectables with 11 molecules currently approved in the US along with three manufacturing facilities approved by the US Food & Drug Administration.

Baxter outbid a number of suitors for Claris Injectables. Media reports had previously said that private equity firms Carlyle Group and Bain Capital were in the race to acquire the company. Interestingly, Baxter was one of the buyers in the fray for another injectables asset, Gland Pharma, which was sold to Chinese firm Fosun International last month for $1.26 billion.  

Claris Lifesciences counts OrbiMed and Signet as PE investors. Last year, Carlyle had exited the firm.

Baxter said it will build upon Claris Injectables’ existing footprint by adding its differentiated technologies and making strategic investments to expand Claris Injectables’ R&D pipeline and manufacturing capacity. 

Through this combination, Baxter anticipates launching seven to nine new products annually over the next few years, increasing to 10-15 anticipated new product launches a year beyond 2019.

“The Claris Injectables acquisition will expand Baxter’s presence in the fast growing, global generic injectable pharmaceuticals space and accelerate our growth trajectory with high-value, essential medicines that will benefit patients worldwide,” said Jose Almeida, chairman and CEO, Baxter. 

Baxter said it estimates that the global sterile generic injectables market is more than $40 billion and is growing at a 10% compound annual growth rate.

Arjun Handa, executive vice chairman and group managing director at Claris Lifesciences, said Baxter’s roots in the hospital business and expertise to advance the business as a strategic platform will catapult the combined organisation’s R&D, manufacturing and people capabilities.

Claris Injectables’ products are sold in more than 75 markets around the world, with direct sales in the US and India. The unit is estimated to deliver annual global revenue in excess of $100 million in 2016. Global revenue for the business has risen by double digits annually over the past several years, driven by new product launches and geographic expansion, Baxter said. It added that it will finance the transaction through cash on hand, debt or a combination.

Baxter provides a broad portfolio of essential renal and hospital products, including home, acute and in-center dialysis; sterile IV solutions; infusion systems and devices; parenteral nutrition; biosurgery products and anesthetics; and pharmacy automation, software and services. 

The transaction is subject to regulatory approvals and other customary closing conditions.

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PE-backed Claris to sell injectables unit to Baxter for $625 mn

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