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USFDA warning shaved off $100M from Mylan’s deal to buy Agila from Strides Arcolab

Drug firm Strides Arcolab Ltd has received $150 million as the full and final settlement from the American drugmaker Mylan Inc for selling Agila Specialties Pvt Ltd restricting the overall transaction value to $1.65 billion as against up to $1.75 billion.

Strides disclosed on Thursday that it has agreed to receive from Mylan an amount of$150 million as the full and final settlement against the contingent holdback of up to $250 million.

The firm is expected to furnish further details in the first week of October on how it is going to use the proceeds.

In December 2013, Mylan held back $250 million from the total announced purchase price of $1.75 billion for Agila until Strides fulfilled the regulatory conditions.

In February last year, Mylan had agreed to acquire Agila to strengthen its presence in the fast-growing injectable medicine market.

As part of this, Strides received $1.5 billion and had a potential additional consideration of up to $250 million subject to the satisfaction of certain conditions by Strides Arcolab.

After an inspection, US drug regulator FDA had issued a warning letter to Agila for flouting manufacturing norms in one of its units in Bangalore.

Shares of Strides Arcolab ended the day at Rs 633.55 each, down 9.93 per cent on the BSE in a weak Mumbai market on Thursday.

 (Edited by Joby Puthuparampil Johnson)

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