Granules India has outlined plans to buy drug intermediate and API maker Auctus Pharma, set up an actives R&D site and announced its intention to wind up its ‘shell’ operation in Singapore.
The proposed acquisition – financial terms of which were not disclosed – will add Auctus’ plant in Vishakhapatnam – which makes a portfolio of 12 APIs Granules does not currently produce - and its intermediates facility in Hyderabad to Granules’ network.
News of the deal comes just days after Granules posted a healthy set of quarterly financials and hinted that it may ass manufacturing capacity to try and further expand its API business in the US and Europe.
The proposed takeover – which is due to close in the next six months - fits with this aim according to Granules spokesman Vijay Ramanavarapu, who told in-Pharmatechnologist.com around 60% of Auctus’ business comes from the US and Europe.
He added that that – in addition to being approved by the US FDA, EDQM, Health Canada, the KFDA and the WHO – Auctus has the “written confirmations” of quality needed to ship APIs to Europe.
This year Granules expects Auctus’ API and intermediates businesses to generate revenue of between $20m and $25m according to Ramanavarapu, who added that: “We will be taking on the Auctus team since the team is primarily operations based.”
Announcement of the proposed takeover coincided with the opening of a 10,000 sqft R&D site in Hyderabad that will focus on generic API development and bolster existing capacity at Granules facility in Pune.
News of the proposed takeover and the new R&D centre comes hot on the heels of Granules announcement on the Bombay Stock Exchange (BSE) that it will close its Singapore subsidiary – Granules Singapore PTE Ltd.
The closure plan was widely reported in the Indian press , however, according to Ramanavarapu, the decision to shut down the subsidiary is about simplifying Granules’ corporate structure rather than cost cutting.
He said that: “The closing of Granules Singapore is a non-event,” explaining that the subsidiary was a “shell company” the firm opened several years ago to access foreign-currency loans when India was going through a credit crunch.
“We never utilized Granules Singapore and to make life easier, we closed the subsidiary. There is no material impact on our operations.”