Advertisement

If you have an ACS member number, please enter it here so we can link this account to your membership. (optional)

ACS values your privacy. By submitting your information, you are gaining access to C&EN and subscribing to our weekly newsletter. We use the information you provide to make your reading experience better, and we will never sell your data to third party members.

ENJOY UNLIMITED ACCES TO C&EN

Business

Reddy's Buys Roche Plant in Mexico

Move lengthens list of foreign assets bought by Indian custom manufacturers

by Jean-François Tremblay
November 14, 2005 | A version of this story appeared in Volume 83, Issue 46

RUSH TO GROW
[+]Enlarge
Credit: Dr. Reddy's photo
Dr. Reddy's expects the Roche plant acquisition in Cuernavaca, Mexico, to multiply its custom pharmaceuticals business 10-fold.
Credit: Dr. Reddy's photo
Dr. Reddy's expects the Roche plant acquisition in Cuernavaca, Mexico, to multiply its custom pharmaceuticals business 10-fold.

GLOBAL BUSINESS

One of India's leading drug companies, Dr. Reddy's Laboratories, will pay about $59 million to buy a Roche plant in Cuernavaca, Mexico, producing active pharmaceutical ingredients (APIs). The move makes the company the latest custom manufacturer in India to snap up foreign assets.

The Mexican facility, inspected and approved by the U.S. FDA and other regulators, has nearly 340 staff members. As part of the deal, the Hyderabad-based firm will also inherit ongoing contracts with Roche customers. The plant makes about 18 products consisting mostly of mature APIs, pharmaceutical intermediates, and steroids.

Reddy's president of developing businesses, Abhijit Mukherjee, says the acquisition will boost Reddy's custom pharmaceutical services business. The Indian firm expects its sales in this segment to grow 10-fold to $100 million per year over the next 18 months.

After years of operating locally, Indian custom pharmaceutical chemical makers are starting to buy assets in foreign countries. Mumbai-based Nicholas Piramal India announced last month that it would spend $17 million for British pharmaceutical chemical producer Avecia Pharmaceuticals. Piramal expects the purchase to provide opportunities to make early-stage compounds for drug industry customers.

Jubilant Organosys, based in Noida, Uttar Pradesh, last month agreed to spend $34 million to buy a New Jersey clinical trials company. And in May, Chennai's Malladi Drugs & Pharmaceuticals paid $23 million for Novus Fine Chemicals, an API producer based in Carlstadt, N.J.

The companies are acquiring foreign assets at the same time that a number of Western pharmaceutical chemical producers are scaling back their operations. Piramal says the custom pharmaceutical producer of the future "will have a strong manufacturing base in India with technology and early-phase beachheads in North America/Europe."

Article:

This article has been sent to the following recipient:

0 /1 FREE ARTICLES LEFT THIS MONTH Remaining
Chemistry matters. Join us to get the news you need.