Issue Date: July 14, 2008
Fresenius, the Berlin-based supplier of hospital, dialysis, and home medical care products, has agreed to acquire APP Pharmaceuticals, a Schaumburg, Ill.-based maker of generic injectable drugs, in a stock deal valued at $3.7 billion. Fresenius also will assume APP's approximately $940 million in debt.
The acquisition gives Fresenius a foothold in the U.S. market for injectable drugs. With 2007 revenues of nearly $650 million, APP manufactures more than 100 hospital-based injectable therapies for oncology, anti-infective, anesthetic/analgesic, and critical care markets. It became the lead supplier of heparin, a key blood-thinning agent for patients on dialysis, after the recent recall of Baxter International's heparin product.
APP also will add a generic drug portfolio to the German firm's product line at a time when major pharmaceutical firms are looking to diversify their offerings with generics. Last month, for example, Japan's Daiichi Sankyo said it would acquire the Indian generics firm Ranbaxy Laboratories (C&EN, June 16, page 14).
Within Fresenius, APP will join the Fresenius Kabi infusions division. "The acquisition provides significant growth opportunities for Fresenius Kabi," says Ulf Mark Schneider, chairman of Fresenius' management board. "With the APP platform, Fresenius Kabi will be able to market its product range in the U.S."
The new deal is part of a general trend among drug companies to integrate generics into their existing operations, says Viren Mehta, founder of biopharma financial advisers Mehta Partners, which counseled Daiichi in the Ranbaxy acquisition. "Any company that wants to survive, if not prosper, will have to look at the entire value chain," he says.
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