Lupin buys US firm Symbiomix Therapeutics for $150 million
Mumbai: Lupin Ltd on Wednesday said its US subsidiary has acquired Symbiomix Therapeutics LLC for a cash consideration of $150 million, in a bid to expand in the women’s health segment.
The total cash consideration includes an upfront payment of $50 million and other time-based payments. Lupin will also make certain sales-based contingent payments to Symbiomix, the Indian drug maker said in a release, adding that the acquisition is funded from internal accruals.
US-based Symbiomix is focused on bringing innovative therapies for gynaecological infections that could lead to serious health consequences. In September, the US Food and Drug Administration (FDA) approved Symbiomix’s lead product, Solosec oral granules, for treatment of bacterial vaginosis.
Lupin expects Solosec to be commercially available by mid-2018. The product has been designated as a Qualified Infectious Disease Product (QIDP) by the US Food and Drug Administration (FDA).
QIDP designation is for medications intended to treat serious or life-threatening infections. This status makes Solosec eligible for at least 10 years of exclusivity in the US.
US physicians prescribe more than 6 million prescriptions for bacterial vaginosis per year. Solosec is the first and only oral single-dose treatment option for the disease and hence has the potential to take significant share in that market, said Vinita Gupta, chief executive of Lupin.
“For bacterial vaginosis, the highest number of prescription is for metronidazole (brand name Flagyl). Majority of share that we would be targeting for Solosec is from metronidazole. We are still trying to determine what the ideal pricing is but other branded products in the segment are between $150 to $250 per prescription,” Gupta said.
The company expects Solosec to contribute over $100 million per annum once it is ramped up in 3-4 years.
The acquisition of Symbiomix and its brand Solosec significantly expands Lupin’s branded women’s health specialty business, which is at present anchored by Methergine tablets. It meets the company’s six-year payback criteria for strategic acquisitions, Gupta said.
“This transaction is an important milestone in the evolution of our specialty business and gives Lupin a new therapeutic to bring to obstetricians and gynaecologists to treat a serious health condition they see frequently in their practices,” Gupta said.
“Lupin will be able to leverage its current women’s health marketing force, bringing operating leverage. The product is likely to take some time to scale up, post which it should break even. We remain positive on the stock considering strong complex generic launch pipeline, growing India branded business and comfortable valuations,” said Amey Chalke, analyst at HDFC Securities.
Lupin has been looking to expand its specialty drugs portfolio in the US market to counter the persisting pricing pressure in generic drugs. The company is scouting for specialty assets in the US in the area of women’s health, pediatrics and neurology.
“We have the capacity to leverage our balance sheet to a $1 billion, but it will be spread over several tranches. Our sweet spot still remains the $150-200 million range and we plan to do several deals of this size over the next several quarters,” said Ramesh Swaminathan, chief financial officer and executive director of Lupin. On Wednesday, shares of Lupin fell 1.4% to Rs1,045.50 on BSE, while the exchange’s benchmark Sensex shed 0.3% to 31,833.99 points.
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