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Business

India Goes West

Nicholas Piramal continues its global expansion with purchase of Pfizer facility in the U.K.

by Lisa M. Jarvis
June 16, 2006

Continuing its aggressive pursuit of a top-three position in the global custom manufacturing arena, Mumbai-based Nicholas Piramal India Ltd. (NPIL) has agreed to acquire Pfizer's Morpeth, England, manufacturing site. Financial terms are not being disclosed.

As part of the deal, NPIL will supply Pfizer with active pharmaceutical ingredients (APIs) out of the site through 2011. Pfizer used the Morpeth facility, which employs about 450 people, to manufacture APIs for cardiovascular and arthritis drugs.

The pact moves NPIL further up Pfizer's supply chain. NPIL secured a seven-year contract last December to provide process development and scale-up services for Pfizer's animal health division. According to the Indian firm, the addition of Morpeth will make NPIL the biggest supplier in dollar terms in Pfizer's global contract manufacturing network.

Snagging the Morpeth site is part of a strong push by NPIL into the global contract manufacturing arena. The company has played a role in the pharmaceutical outsourcing arena for years, but until 2002 was primarily focused on serving the domestic drug market. Through a combination of marketing efforts and acquisitions, most notably its purchase last October of Avecia Pharmaceuticals, NPIL has significantly broadened its presence on the global contract manufacturing scene.

Upon completing the purchase of the Morpeth facility, NPIL's annual contract manufacturing revenues will be more than $200 million, which the company says will put it among the top 10 pharmaceutical outsourcing firms. In 2003, contract manufacturing sales amounted to between $30 million and $40 million.

For Pfizer, the divestiture of the Morpeth site is part of a global manufacturing optimization program initiated in late 2003 following the acquisition of Pharmacia. The goal is to pare back its internal manufacturing network by 25% through divesting, shutting down, or cutting back operations at facilities across the globe.

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