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US-headquartered Viatris (formerly Mylan) is selling its active pharmaceutical ingredients (API) and women’s healthcare businesses in India for a combined consideration of $1.2 billion to Secunderabad-based investment firm IQuest Enterprises and Spanish firm Insud Pharma as part of a global divestiture drive to pare debt.
Viatris said in a statement from Pittsburgh, US, that it has executed an agreement to divest its API business in India to IQuest Enterprises. “The transaction includes three manufacturing sites and an R&D lab in Hyderabad, three manufacturing sites in Vizag, and third-party API sales. Viatris will retain some selective R&D capabilities in API. The transaction is expected to close in Q1 2024,” the statement said.
IQuest Enterprises is promoted by the family of erstwhile Matrix Labs promoter Nimmagadda Prasad. Prasad had sold his stake in Matrix Labs in 2006 to Mylan. Thus, this deal marks the homecoming of 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 pharmaceuticals and healthcare space – including investments in CARE Hospitals, Celon Laboratories, etc.
“We are excited about our largest investment in the pharmaceutical sector to date. Our investment comes at an opportune time when India is drawing significant attention amongst the global pharma industry,” noted IQuest Enterprises Executive Director Gunupati Swathi Reddy. IQuest emerged as the preferred investor following a global competitive bid.
Insud Pharma, a Spanish pharma company, has bought the women’s healthcare business that includes two manufacturing facilities in India – Ahmedabad and Sarigam. The women’s healthcare business relates to oral and injectable contraceptives primarily. This transaction will also close by Q1 2024.
Viatris said, “With this announcement, the company has delivered its commitment to announce agreements on all planned divestitures by the end of 2023, within the company’s previously communicated range, after considering the estimated retained value.”
Viatris CEO 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-I commitments, including the expected achievement of our deleveraging target of three times gross leverage in the first half of 2024, importantly it will also set the company up extremely well as we enter into our Phase-II strategy for 2024 and beyond.”
Viatris CFO Sanjeev Narula had said in August that they continue to prioritise deleveraging the balance sheet with $6.1 billion of debt paydown 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 12 times on 2022 estimated adjusted Ebitda for its portfolio of divested assets,” it added. 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.
With inputs from PTI
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