Lupin Ltd, India’s fourth-largest drugmaker by sales, has agreed to buy US peer GAVIS Pharmaceuticals LLC for $880 million to increase its presence in the United States, its largest market, where sales growth has slowed.
Lupin said US sales fell 31 per cent to $180 million in April-June, leading to a net profit decline of 16 per cent to Rs 5.25 billion ($82.35 million). That compared with the Rs 6 billion estimate of 45 analysts polled by Reuters.
The drugmaker’s US growth has been hampered by a slower pace of winning generic drug approvals since the US Food and Drug Administration overhauled its generics review process.
Lupin said buying privately held GAVIS would give it access to 66 generic drugs for which the New Jersey firm has sought approval, representing a potential market value of $9 billion.
Lupin would also gain dermatology drugs, controlled substance products and other speciality generics.
Lupin said it expects GAVIS to contribute to earnings in the first full year after purchase. Last year, GAVIS’ sales reached $96 million.
Also read: Lupin Q1 net dips by 16% at Rs 525.02 cr
GAVIS could not be reached for comment outside of regular US business hours.
Lupin on Thursday reported a 15.96 per cent dip in its consolidated net profit at Rs 525.02 crore for the quarter ended June 30, mainly on account of decline in its overseas sales.
Shares of Lupin closed 5.3 per cent lower after the announcement, compared with a 0.5 per cent fall in the broader market.