Mylan Buys Agila Citing Global Injectable Drug Shortages as Driver

By Dan Stanton

- Last updated on GMT

Related tags: Food and drug administration, Pharmacology

Mylan acquires Agila for $1.6bn
Mylan acquires Agila for $1.6bn
Mylan says its acquisition of Agila puts the generics company in a “leading position” in the injectables market.

During a conference call announcing end-of year results, Mylan said it had come to a definitive agreement to acquire Agila Specialities from Strides Arcolab for $1.6bn (€1.23bn), moving the generic pharmaceuticals firm further into the injectables manufacturing sector.

CEO Heather Bresch told shareholders the acquisition brings Mylan “one of the most diversified, highest quality and state-of-the-art injectables manufacturing bases in the industry”​ and that it would grow product capacity over 50 times “overnight.”

Mylan President Rajiv Malik added that the acquisition “helps to fill significant gaps in our injectables business in terms of contracting capacity and technical capabilities”​ and is part of the company’s strategy to become one of the top three injectables providers.

The deal brings more than 300 filings to Mylan’s assets including 61 abbreviated new drug applications (ANDAs) approved by the FDA (US Food and Drug Administration). As for facilities, Agila comes complete with nine manufacturing plants - six in India, two in Brazil and one in Poland - of which eight have approval from the FDA.

The acquisition is Mylan's third in the market following its purchase of Merck KGaA's generic injectables division​ in 2007 and the 2010 takeover of Ireland's Bioniche​. Furthermore, Mylan has more recently collaborated with Biocon​ in a long-term deal over a number of biosimilars.

Shortage of Injectables

According to Bresch, one of the main drivers for the deal was that 80% of drug shortages in the US were down to sterile injectables.

Recent lapses in injectable manufacturing quality include Hospira​ – which forced to recall a number of injections following constant FDA re-inspections - and at Boehringer Ingelheim owned CMO Ben Venue​, which recently received a consent decree following 18 months of turmoil at its manufacturing facility.

“Over 45% of the drug shortages have been attributed to these quality and manufacturing issues,”​ Bresch said, adding there is “an opportunity for someone to step in with quality, reliable supply.”

She continued: “Now more than ever, leadership is needed in this very important space as some current market leaders are experiencing significant quality issues, resulting in supply disruptions and product shortages.”

Other players who have entered the injectables market recently include Scinopharm​, who has invested in upping its capacity to manufacture cancer drugs and GlaxoSmithKline​ who, earlier this year, signed a joint venture to develop a new paediatric vaccine with Indian developer Biological E.

However, according to Bresch, interest from “other large players in this arena… will come and go and have their volatility”​ as Mylan takes the opportunity to “establish a leadership position”​ in the injectables market.

Malik added: “With the injectables market expected to grow at a compound annual growth rate of 13% from 2011 to 2017, outpacing most other dosage forms, addressing these gaps was strategically important.”

Global Goals

Agila currently receives over 40% of its revenue from the US market and presently has contract manufacturing deals with Pfizer, Sagent, Aspen and Apotex.

However the majority of Agila’s production is unpartnered and focused in increasingly important new markets such as Brazil which, according to Malik, contributes 25% of Agila’s current revenue and gives Mylan an instant gateway into Latin America.

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