Lupin Ltd.’s U.S. arm has acquired privately held Symbiomix Therepeutics LLC. for $150 million cash as the drugmaker looks to solidify its presence in the women's healthcare segment.
The acquisition includes $50 million upfront and other milestone-based payments, Lupin said in its exchange filing. The deal will be funded from internal funds and was closed today.
For Lupin, the big catch in the deal is Symbiomix’s Solosec drug – the first one-dose oral treatment for bacterial vaginosis. Obstetricians and gynaecologists make 6 million prescriptions for bacterial vaginosis every year, according to Lupin’s Chief Executive Officer Vinita Gupta.
“The deal will help (Lupin) build a franchise around women’s healthcare, with Solesec as the anchor product,” Gupta said in an media briefing call on Wednesday.
The drugmaker’s women’s health specialty business was so far being anchored by the Methergine tablets acquired after buying Gavis Pharmaceutical for $880 million in March 2016.
In September, chief financial officer of Lupin Ramesh Swaminathan had told BloombergQuint that the drugmaker is eyeing acquisitions in women’s health and paediatrics space to cut its dependence on generic drugs. Lupin’s balance sheet had the capacity to borrow another $1 billion to acquire these assets in tranches “ideally” between $150-$200 million, he had said.
Solosec has also been classified as a “Qualified Infectious Disease Product” by the U.S. Food and Drug Administration, giving Lupin more time for marketing exclusivity for the drug. “The product is eligible for more than 10 years of exclusivity,” Gupta added. She expects the Symbiomix deal to pay off in less than six years.
The acquisition comes at a time when Lupin and other Indian generic drugmakers face price erosion in the U.S. coupled with regulatory hurdles.
Lupin’s new buy highlights the “need to act and accelerate transition beyond generics” for Indian drugmakers, brokerage Credit Suisse said in a research note. The profit contribution from Solosec, however, "will not be significant due to ramp-up required for the drug and initial launch expenses," Credit Suisse added.
Gupta said Japan, Canada and Australia will be potential markets for Solosec, adding that Lupin will look at completing more such “middle scale deals” in the coming quarters.
Shares of Lupin Ltd. closed 1.4 percent lower, while the benchmark BSE Sensex ended trade 0.28 percent down. The stock had risen for seven straight sessions before Wednesday.