The company’s board noted a “significant amount” of interest by third parties in purchasing the business but decided that it is uniquely positioned to create further value by leveraging its manufacturing facilities, portfolio, pipeline and global distribution platform. The unit could have potentially fetched up to $2bn, according to anonymous sources cited by Bloomberg News.
"After a thorough review of strategic options for the Injectables business, we are confident that retaining and continuing to invest in this business is the best option for shareholders,” Said Darwazah, CEO of Hikma, said.
In 2012, the company’s injectables revenue in the US grew by $134mn, or more than 82% over 2011, with expanded manufacturing capacity in Cherry Hill, NJ and Portugal. Hikma established itself in the US in 2010 when it purchased Baxter’s sterile injectables unit for only $112M. The NJ plant and a warehousing and distribution centre in Memphis, Tennessee were included as part of the deal.
The injectables business in 2012 also received a total of 41 regulatory approvals across all of the company’s markets, including 11 in MENA (Middle East and North Africa), 22 in Europe and 8 in the US.
Interest in US injectables businesses has skyrocketed recently, especially since Mylan purchased India's Strides Arcolab's injectables business for $1.6bn in March, which includes eight FDA-approved manufacturing sites. Some estimate that 80% of drug shortages in the US involve sterile injectables.
Mylan president Rajiv Malik estimates that the world injectables market is expected to grow at a compound annual growth rate of 13% through 2017.
Taiwan-based API maker ScinoPharm has also recently made deal that will push them into the injectables space.
The growth of shortages come as some companies, such as Hospira, face manufacturing delays. Most recently, the FDA re-inspected Hospira’s Rocky Mount, North Carolina plant and issued a Form 483 for 20 violations. Hospira also issued a number of recalls of its injectables recently due faulty packaging and contamination.
Boehringer Ingelheim-owned CMO Ben Venue has seen similar lapses at its injectable manufacturing plants and was hit with a consent decree from the FDA.