Hospira to buy API manufacturing and r&d facilities in India

Purchase from Orchid will support continuity of antibiotic API supply

Hospira, a US manufacturer of injectable drugs, has agreed to buy a factory and a research and development centre from Indian pharmaceuticals firm Orchid Chemicals & Pharmaceuticals for US$200m.

The factory, located in Aurangabad in India’s western state of Maharashtra, manufactures active pharmaceutical ingredients. It was built in 2000 and employs around 640 people.

The r&d facility in the southern city of Chennai has about 160 scientific personnel.

Hospira, based in Lake Forest, Illinois, says the acquisition of the FDA-approved manufacturing facility will reduce costs, support continuity of supply of key antibiotic products and pave the way for future API development.

Dr Bhaktavatsala Rao, managing director, Hospira India, said: ‘This is a top-of-the-line API manufacturing facility that has been recognised by industry leaders for its high standards. We look forward to welcoming our new colleagues from Orchid and leveraging their expertise to continue to bring high quality, lower-cost products to patients around the world.’

The acquisition, which follows Hospira's 2010 purchase of Orchid's generic injectable finished-dosage form pharmaceuticals business, will enable the firm to integrate vertically into certain beta-lactam antibiotic APIs (penems and penicillins) with a wide spectrum of antibacterial activity.

Orchid will retain its cephalosporin API business and facilities, and will continue to supply Hospira with this associated ingredient.

The boards of directors of both companies have approved the deal, which should be completed in the fourth quarter.

Hospira expects the deal to break even or slightly increase earnings per share in the first year after completion.

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