Aurobindo Focuses on Injectables with Plans for Spin-Off Subsidiary

By Dan Stanton

- Last updated on GMT

Related tags: Pharmaceutical drug

Aurobindo to spin-off injectables
Aurobindo to spin-off injectables
Consolidating its Indian injectable business under a new subsidiary will improve focus and align quality control, says Aurobindo who has invested in two manufacturing companies to support such plans.

Indian drugmaker Aurobindo announced it was looking into spinning-off its injectable business as a wholly owned subsidiary, in a filing to the Bombay Stock Exchange​ last Saturday.

Aurobindo spokesperson T Roy Choudhury confirmed to in-Pharmatechnologist.com that a sub-committee of independent directors is to make a presentation in the next couple of months to assess the separation of the injectable business.

“All our injectable units will be shifted under one umbrella to have a much bigger focus and manage the business a lot better,”​ Choudhury said.

This includes injectable units run by Aurobindo in the Andhra Pradesh region of India – including its new Unit IV liquid injectable plant - and its subsidiary Auronext, located in the Haryana region.

The Board also approved plans to acquire a 60% share of Celon Laboratories for INR 156m ($2.5m). Celon is constructing a greenfield facility which will manufacture injectables for hormonal and oncology products and Aurobindo has committed a further INR 323m over the next 12 months to complete the plant.

A second acquisition - detailed in Aurobindo’s filing – is a 57% stake in Silicon Life Sciences Private. According to Choudhury the firm manufactures non-sterile APIs (active pharmaceutical ingredients) and the purchase will “act as a feeder,” ​supplying APIs for Aurobindo’s new injectables business.

Injectable Quality Assurance

News of an Indian facility receiving an FDA 483 or Warning Letter is becoming a staple sight on our website – Strides Arcolab​ and Fresenius Kabi​ have both made headlines in recent weeks – and Aurobindo too has been subject to problems with the FDA (US Food and Drug Administration)  in the past.

The Chitkul Village cephalosporin facility – known as Unit VI - was subject to a warning letter​ in 2011, citing concerns over potential microbiological contamination, which led to an import ban that has only recently been lifted.

“We put in a lot of effort in auctioning the observations made by the inspectors in order to make the facility compliant,”​ said Choudhury.

"We now have a very strong focus on safety,”​ he continued, adding as part of the restructure all its facilities - including the new Celon plant - will be aligned to the same standard. “We have learned our lessons the hard way.”

The firm reported Q1 2014 operating income of INR 17.2bn, up 41% on the same quarter last year with a net profit of INR 186m, compared to a loss of INR 1.29bn.

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