Hospira Seals Deal To Acquire Orchid
By Lori Clapper
Hospira, a U.S. based injectable drugs maker, inked a $218 million deal today to officially acquire the active pharmaceutical ingredient (API) manufacturing facility and research and development (R&D) facility from India-based Orchid Chemicals & Pharmaceuticals.
The acquisition comes nearly two years after Hospira first rolled out the original agreement, which required $30 million in prior advances. Orchid Pharma had experienced high levels of debt since it redeemed its outstanding FCCBs in February 2012. However, to seal the deal, it implemented the approved Corporate Debt Restructuring (CDR) package along with the BTA, the Business Standard reported.
"Hospira's acquisition of the Orchid API facility will support supply continuity of key beta-lactam antibiotic products, improve our cost position and pave the way for future API development," Dr. C. Bhaktavatsala Rao, president and managing director, Hospira India, said. "We're committed to the antibiotics space, and with our new colleagues from Orchid, we will continue to bring high-quality, lower-cost products to patients around the world."
Hospira, which is known for its critical antibiotic injectable products, said this acquisition empowers the company to “vertically integrate into the beta-lactam antibiotic APIs (penems and penicillins),” which has a wide spectrum of antibacterial activity. The company believes that the backward integration into these beta-lactam APIs will improve the company's security of supply, according to a company announcement.
Orchid Pharma’s API manufacturing facility manufactures sterile APIs and employs approximately 665 employees including chemists, engineers, and technicians. The Orchid R&D facility’s 110 staff members will be directed primarily to beta-lactam and other API development.
As part of the deal, Orchid will retain its cephalosporin API business and facilities, as well as certain nonantibiotic, nonsterile businesses and facilities it owns, and it will continue to supply Hospira with cephalosporin APIs.