The Board of Directors at Indian firm Orchid has approved the sale of its API business to Hospira, bringing the acquisition a step closer to completion.
The $200m (€160m) acquisition of Orchid’s active pharmaceutical ingredients (APIs) facilities in India was intended to support Hospira’s expanding antibiotic business when announced in August 2012 .
Eighteen months later and the deal is closer to completion after Orchid filed a release with the Bombay Stock Exchange announcing the Corporate Debt Restructuring Empowered Group (CDR) has approved the debt restructuring package, issuing a letter of approval last week which the Board of Directors has signed off on.
Amongst the features of the CDR, the firm said, was the “sale and transfer of Orchid’s Penecillin and Penems (including Carbapenems) API business together with its manufacturing facilities at Aurangabad, Maharashtra and Associated R&D facility at Sholinganallur, Chennai.”
When contacted by in-Pharmatechnologist.com, Hospira spokesperson Tareta Adams said “the approval of the Orchid debt restructuring package is another important step in the process and brings Hospira closer to completing the acquisition,” but was unable to tell us when the deal would go through.
In-House API Production
However, speaking in December last year at Hospira’s investor day, CEO Michael Ball predicted the acquisition would be completed within six months and not only would it support the Chennai finished dose antibiotic facility bought from Orchid in 2010 , but would cut down the reliance on third party API makers.
“Right now, Hospira only produces less than 10% of its own APIs and one of the ideas behind the Orchid acquisition is to up that percentage,” he told stakeholders.
“[By 2015] we should be somewhere around 30% of our API coming from homegrown sources, and with a couple of other inorganic moves we think we can get this number to 50% by 2018.”