Dr Reddy's Labs to buy Dowpharma's UK business
Hyderabad-based Dr Reddy’s Labs announced it will acquire the UK business of Dowpharma Small Molecules, a unit of the $54-billion Dow Chemical Company, for an undisclosed sum.
By TNN |
BANGALORE: Hyderabad-based Dr Reddy���s Labs announced it will acquire the UK business of Dowpharma Small Molecules, a unit of the $54-billion Dow Chemical Company, for an undisclosed sum. The deal, that will bring process technology to Dr Reddy���s stable, will also accrue $25 million to the Indian pharma major���s revenues.
The acquisition covers Dowpharma���s facilities in Mirfield and Cambridge in the UK and also existing customer contracts, associated products, intellectual property and trademarks.
Pharma trackers peg the value of the deal in the sub-$50 million category and closer to the $30 million range. According to them, the acquisition, driven by technology and IP, will give a push to Dr Reddy���s custom pharma services (CPS) business, which crossed the $100-million revenue mark last year. In fact, the company���s acquisition of Roche���s manufacturing unit in Mexico, two years back, was in line with its focus on this business segment.
���The deal is mainly for a larger CPS play. The key attraction for Dr Reddy���s is the technology to produce chirally pure molecules by chiral separation techniques. We will offer this technology to customers under our CPS as well as deploy it for our API business,��� Dr Reddy���s CEO G V Prasad told ET. Dr Reddy���s scrip on the BSE closed higher at Rs 593.55, from the previous closing of Rs 590.95.
For Dr Reddy���s, the deal would bring proprietary chiral and biocatalysis technology from Dow���s Cambridge site, scale up capability from Mirfield site apart from strengths in industrial synthesis of complex prostaglandins and carbohydrate chemistry.
Dr Reddy���s has entered into a definitive agreement with the Dow Chemical Company and the transaction is expected to close on April 30. Dowpharma���s UK business 80 people. Dr Reddy���s will also have a non-exclusive license to Dow���s Pfenex Expression Technology for biocatalysis development.
In a statement, Dr Reddy���s MD and COO Satish Reddy said, ���These newer capabilities will add to our existing R&D and commercial infrastructure to position Dr Reddy���s as a leading provider of custom pharmaceutical services globally.���
The acquisition covers Dowpharma���s facilities in Mirfield and Cambridge in the UK and also existing customer contracts, associated products, intellectual property and trademarks.
Pharma trackers peg the value of the deal in the sub-$50 million category and closer to the $30 million range. According to them, the acquisition, driven by technology and IP, will give a push to Dr Reddy���s custom pharma services (CPS) business, which crossed the $100-million revenue mark last year. In fact, the company���s acquisition of Roche���s manufacturing unit in Mexico, two years back, was in line with its focus on this business segment.
���The deal is mainly for a larger CPS play. The key attraction for Dr Reddy���s is the technology to produce chirally pure molecules by chiral separation techniques. We will offer this technology to customers under our CPS as well as deploy it for our API business,��� Dr Reddy���s CEO G V Prasad told ET. Dr Reddy���s scrip on the BSE closed higher at Rs 593.55, from the previous closing of Rs 590.95.
For Dr Reddy���s, the deal would bring proprietary chiral and biocatalysis technology from Dow���s Cambridge site, scale up capability from Mirfield site apart from strengths in industrial synthesis of complex prostaglandins and carbohydrate chemistry.
Dr Reddy���s has entered into a definitive agreement with the Dow Chemical Company and the transaction is expected to close on April 30. Dowpharma���s UK business 80 people. Dr Reddy���s will also have a non-exclusive license to Dow���s Pfenex Expression Technology for biocatalysis development.
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In a statement, Dr Reddy���s MD and COO Satish Reddy said, ���These newer capabilities will add to our existing R&D and commercial infrastructure to position Dr Reddy���s as a leading provider of custom pharmaceutical services globally.���
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