The first and larger of the two deals saw Lannett shell out $1.23bn (€1.1bn) for UCB’s specialty generics wing, Kremers Urban (KU), adding a product portfolio of 18 products and a recently inspected 381,000sq ft manufacturing and warehousing facility in Seymour, Indiana.
“This is a transformational acquisition that is an exceptional strategic fit and builds upon our stellar financial performance over the last several years,” said Lannett CEO Arthur Bedrosian. “KU brings considerable manufacturing capacity, a first class research and development team and the potential for advancing our active pharmaceutical ingredients business.”
The deal is the latest for Lannett in the generics space, following last year’s acquisition of Silarx Pharmaceuticals and the addition of two generic drugs from an undisclosed company.
Cipla buys InvaGen
Also this week, Mumbai, India-based Cipla has entered an agreement to buy two US-based generics drugmakers, InvaGen pharmaceuticals and Exelan Pharmaceuticals, for a total of $550m.
While Exelan brings market access to Cipla, InvaGen bolsters Cipla’s portfolio through 40 approved ANDAs and adds a local manufacturing facility in Long Island, New York.
The 350,000sq ft GMP-approved plant has the capabilities to produce immediate release, modified release and extended release tablets and produces over 12 billion units annually.
“This investment is in line with Cipla’s strategy to grow Cipla’s share in the US pharmaceutical market,” said Cipla CEO Subhanu Saxena. “We see InvaGen as a strong strategic fit with a relevant diverse portfolio as well as a strong market and customer presence. With a local manufacturing facility, Cipla can further strengthen its presence and commitment to serve patients in the country.”
The two deals are the latest in a spate of M&A activity in a generics sector that was described in a recent analyst report as an “eat or be eaten” industry.
But while Cipla and Lannett continue to grow, Evercore ISI analyst Umer Raffat told us these mid-sized players would not affect the dominance of the Big 3 – Teva, Mylan and Sandoz - in any meaningful way.
The ‘Big 4’ became the ‘Big 3’ in July when Teva announced it was buying Allergan’s generic business for over $40bn.
Meanwhile Mylan is attempting to consolidate the industry further by buying Perrigo for more than $30bn, and Pfizer’s closure of its Hospira acquisition has also eliminated a major player from the generics space.