Aurobindo arm to acquire dermatology, oral solids businesses of Sandoz, US

Aurobindo Pharma Ltd's wholly-owned subsidiary, Aurobindo Pharma USA Incorporated signed a definitive agreement to acquire commercial operations and three manufacturing facilities related to dermatology and oral solids businesses in US from Sandoz Inc., USA, a Novartis Division.

This is a carved out business of Sandoz in US and the product portfolio consists of Dermatology, Cns, Alimentary Tract/Metabolic, Women's Health, Anti-Infectives, Systemic Hormones and others. Aurobindo will thus acquire a manufacturing facility with specialized capabilities in creams, ointments, lotions, topical solutions and topical suspensions which are highly complementary to Aurobindo' s current manufacturing footprint.

The acquired portfolio of ~ 300 products is expected to generate over US$0.9 billion (~ Rs 6,471 crore) in sales for the first 12 months after completion which is expected during calendar year 2019 subject to clearance from USFTC. Transaction is expected to be accretive to normalized EPS from first full year of ownership.

Acquisition is for an upfront purchase price of US$0.9 billion (~ Rs 6,471 crore) cash including value of potential upside in near term earn-out and additional potential earn-out on pipeline product in outer years. The transaction will be all in cash on debt-free and cash-free basis financed through debt.

Overall, the transaction will position Aurobindo as the 2nd largest dermatology player and the second largest generics company in the US by prescriptions. This US acquisition is in line with Aurobindo's strategy to strengthen, diversify and grow its global business and to expand and enhance its product portfolio offerings in the key therapeutic areas. The US and Europe are Aurobindo's two most important markets accounting for over 70 per cent of the company's US$ 2.6 billion sales.