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Business News/ Companies / News/  Aurobindo Pharma calls off $1 billion deal with Sandoz after failing to get FTC nod
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Aurobindo Pharma calls off $1 billion deal with Sandoz after failing to get FTC nod

The Hyderabad-based firm did not get timely approval from the US FTC
  • Aurobindo had agreed in September 2018 to buy these businesses from Sandoz
  • Aurobindo Pharma has called off a proposed $1 billion purchase of the US dermatology business as well as three manufacturing plants of Sandoz.  (Photo: Bloomberg)Premium
    Aurobindo Pharma has called off a proposed $1 billion purchase of the US dermatology business as well as three manufacturing plants of Sandoz. (Photo: Bloomberg)

    MUMBAI : Aurobindo Pharma Ltd has abandoned a proposed $1 billion purchase of the US dermatology business as well as three manufacturing plants of Sandoz, the generics unit of Swiss drug maker Novartis, as it did not get approval from the US Federal Trade Commission (US FTC).

    “Aurobindo today announced the mutual agreement with Sandoz Inc. to terminate the agreement to buy the Sandoz US generic oral solids and dermatology businesses from Sandoz Inc. This decision was taken as approval from the US Federal Trade Commission for the transaction was not obtained within anticipated timelines," the company said in a regulatory filing on Thursday.

    Hyderabad-based generics drug maker Aurobindo had agreed in September 2018 to acquire these businesses from Sandoz for an upfront payment of $900 million and performance-based payouts of $100 million.

    At the time, the transaction was the largest outbound pharma deal by an Indian company. The previous largest was the acquisition of Gavis Pharmaceuticals Llc and Novel Laboratories by Lupin Ltd for $880 million in 2015.

    In 2016, Aurobindo bid for Israel-based Teva Pharmaceutical Industries Ltd’s Actavis UK Ltd and Actavis Ireland Ltd units. It was pipped to the post by domestic rival Intas Pharmaceuticals Ltd, which paid close to £600 million (around 5,000 crore).

    Other notable transactions in the outbound pharma space in recent years include Cipla Ltd’s acquisition of three products from Teva in the US. In November 2016, Aurobindo had also acquired a few products from Teva’s France portfolio.

    At the time of the Sandoz acquisition, Aurobindo claimed that the deal would catapult it to the second position in the dermatological drugs segment and would also make it the second-largest generics company in the US by prescriptions.

    The acquisition would have provided Aurobindo access to a generic dermatology portfolio, including a wide range of therapeutic areas, such as topical antibiotics, gynaecological and dermatological anti-fungal agents, anti-acne agents, local anaesthetic analgesics, anti-itch, and a dermatological chemotherapeutic agent. The oral non-dermatological portfolio that it would have acquired spanned a wide range of therapeutic areas, including autoimmune disease, antineoplastic agents and hormonal agents. “Sandoz will continue to operate its oral solids and dermatology business as part of the Sandoz US business," Sandoz said in a separate press release on Thursday.

    ABOUT THE AUTHOR
    Swaraj Singh Dhanjal
    " Based in Mumbai, Swaraj Singh Dhanjal is responsible for Mint’s corporate news coverage. For the past eight years he has been writing on the biggest deals in private equity, venture capital, IPO market and corporate mergers and acquisitions. An engineer and an MBA, he started his journalism career in 2014 with Mint. "
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    Updated: 02 Apr 2020, 10:33 PM IST
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