US-based drugmaker Viatris, previously known as Mylan, is selling its active pharmaceutical ingredients (API) and women’s health care businesses in India for a combined consideration of $1.2 billion (nearly Rs 10,000 crore) as part of a $3.6 billion global divestiture drive to pare debt.
The API business is being sold to Secunderabad-based investment firm IQuest Enterprises, while the women’s health care business is going to Spanish firm Insud Pharma.
The API business sale includes three manufacturing sites and a research and development (R&D) laboratory in Hyderabad, three manufacturing sites in Visakhapatnam, and third-party API sales, Viatris said in a statement in Pittsburgh, US. The American drugmaker will retain some select R&D capabilities in API. The transaction with IQuest Enterprises is expected to close in Q1 2024.
IQuest is promoted by the erstwhile Matrix Labs promoter Nimmagadda Prasad’s family. Prasad had sold his stake in Matrix Labs in 2006 to Mylan. Thus, this deal in a way marks homecoming for Prasad in a way. Mylan merged with Pfizer’s Upjohn division to form Viatris in 2019.
IQuest Enterprises has a slew of investments in the pharmaceutical and health care space, including investments in CARE Hospitals and Celon Laboratories.
“We are excited about our largest investment in the sector. This comes at a time when India is drawing significant attention in the global pharma industry,” said IQuest Enterprises Executive Director Gunupati Swathi Reddy.
IQuest emerged as the preferred investor following a global competitive bid.
Insud Pharma, on the other hand, has bought the women’s health care business, which includes two manufacturing facilities in Gujarat — Ahmedabad and Sarigam. The women’s health care business primarily relates to oral and injectable contraceptives. This transaction is likely to also close by Q1 2024.
Viatris Chief Executive Officer Scott A Smith said: “I am very excited about today’s announcement as it marks an important milestone in the execution of our overall strategic plan. Not only will this bring to conclusion all of our Phase 1 commitments, including the expected achievement of our deleveraging target of three times gross leverage in the first half of 2024, (but) importantly it will also set the company up extremely well as we enter into our Phase 2 strategy for 2024 and beyond.”
Earlier, Viatris Chief Financial Officer Sanjeev Narula had said in August the company would continue to prioritise deleveraging the balance sheet with $6.1 billion of debt pay-down since the beginning of 2021.
“Including gross proceeds from the company’s completed biosimilars divestiture, the company expects to realise gross proceeds representing a multiple above 12x on 2022 estimated adjusted Ebitda for its portfolio of divested assets,” the Viatris’ statement noted. It had sold the biosimilars business to Biocon Biologics.
The gross proceeds to the company from all divestitures under the terms of the agreements are up to $6.94 billion, or up to approximately $5.2 billion in estimated aggregate net proceeds, taking into consideration taxes and other costs, including related transaction costs, it added.
Viatris made the strategic decision to retain rights for Viagra, Dymista, and select OTC products in certain markets, representing an estimated retained value of approximately $1.6 billion.
Separately, in another transaction, Viatris entered into an agreement to divest its rights to women’s healthcare products Duphaston and Femoston to Theramex, a leading global specialty pharmaceutical company dedicated to women’s health. The transaction is expected to close in Q4 2023.
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