Dr. Reddy’s decision to sell its active pharmaceutical ingredient (API) manufacturing plant follows the recent sale of the company’s US based manufacturing facility. The sale will include all related fixed assets, current assets, current liabilities and its employees.
Dr. Reddy’s stated that the decision to divest its API manufacturing business unit is a step towards streamlining operations and optimizing costs. The company said that it will allow for a focus on manufacturing generic formulations.
A spokesperson from Dr. Reddy’s told us that from this sale the company is optimistic about realizing meaningful benefits from this transaction. “However, we are not disclosing any specific financials related to anticipated cost savings,” said the spokesperson.
Dr. Reddy’s sold its Tennessee antibiotic manufacturing site to Neopharma. Omnicare Drugs, one of the buyers of the API plant, is a subsidiary of Neopharma.
The first sale to Neopharma was reported to be an attempt by Dr. Reddy’s to optimize global cost structures. In this sale, the company sold its antibiotics (penicillin) portfolio with the sale of its manufacturing site.
The spokesperson told us that the two transactions are still unrelated despite being sold to the same buyer. Therapiva a joint venture between Omnicare drugs, a Neopharma subsidiary, and Laxai manufacturing.