Dr Reddy’s Lab shares gained nearly 1 per cent in an otherwise weak market on Monday after India’s second biggest drug maker inked a pact with Teva Pharmaceutical and an affiliate of Allergan Plc to buy a portfolio of eight abbreviated new drug applications (ANDAs) in the US for around $350 million.
“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,” G V Prasad, co-chairman and CEO of Dr Reddy’s Laboratories said in a release to Bombay Stock Exchange.
The combined sales of the branded versions of the products in the US is around $3.5 billion, Dr Reddy’s added.
The portfolio, which Dr Reddy’s is acquiring, consists of products that are being divested by Teva as a precondition to its closing of the acquisition of Allergan’s generics business, the Hyderabad-based firm said.
The portfolio being acquired is a mix of filed ANDAs pending approval and an approved ANDA and comprised of complex generic products across diverse dosage forms.
The acquisition of these ANDAs is also 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.
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.
As of 10.59 a.m., Dr Reddy’s Lab shares traded 0.59 per cent higher at Rs 3,084 compared to 1.02 per cent decline in the broader Sensex.