PE-backed Laurus Labs sets up US drug ingredients business

By Gareth Macdonald

- Last updated on GMT

Related tags Private equity

Indian API maker sets up US operation
Indian API maker sets up US operation
Warburg Pincus-backed HIV drug ingredient firm Laurus Labs has set up a US presence and development facility in a bid to win more North American customers.

The US division, Laurus Synthesis, is based at a facility in Woburn, Massachusetts which – when operational in March - will offer process development, impurity identification and synthesis route selection services for APIs, intermediates and starting materials.

Chandrakanth Chereddi, VP of Laurus Synthesis, said having a US base will accelerate growth, adding that projects will be supported by scientists at its facility in Hyderabad and by its manufacturing plant in Vizag in India.

News of the investment comes just months​ after US-based private equity firm Warburg Pincus paid $92m (INR5.5bn) for a 32.29% stake in Laurus through its holding company, Bluewater investment.

At the time, Warburg Pincus said Laurus’ API business – which generates about 90% of its revenue through exports and sales to Indian manufacturers serving overseas markets – and unspecified international opportunities were drivers for the deal.

Antiretrovirals and investment

Laurus’ API business comprises antiretroviral actives like efavirenz, emtricitabine and nevirapine and oncology medication ingredients such as oxaliplatin, cisplatin and carboplatin. It also sell some ophthalmic and antihistamine drug ingredients.

The firm’s strategy is to find cheaper ways of making APIs. For example, replacing a reagent called di-ethyl zinc with a mixture of sodium hydride and zinc chloride​ helped it produce antiretroviral ingredients at around a tenth the cost of other methods.

The new US arm is not the only expansion the Laurus has made since the Warburg Pincus investment.

When the original investment was secured company CEO Chava Satyanarayana told India’s Economic Times that Laurus would use some of the money to set up another manufacturing facility in Vizag and scale up capacity at its existing plants.

Part of this plan involved buying a chromatography platform from Novasep and Nilsan Nishotech Systems. 

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