US-based pharma company Mylan Inc said it was buying “certain female health care businesses” from Famy Care Ltd of India.
Famy is largely into generic oral contraceptive products (OCPs) for women.
The acquisition will be for $750 million (Rs 4,600 cr) in cash plus additional contingent payments of up to $50 million.
The deal makes it one of the biggest pharma acquisitions in India, and indeed, one of the biggest FDI deals here.
“The acquisition will build on Mylan’s existing partnerships with Famy Care in North America, Europe and Australia, and provide Mylan with an enhanced and now vertically integrated platform that will accelerate the company’s growth in the important global women’s health care space,” the US company said.
Famy Care, headquartered in Mumbai, India, offers a comprehensive range of women’s health products including oral and injectable contraceptives, intra-uterine devices (IUDs), tubal rings and hormone- replacement therapy products.
More than 15% of the world’s women using oral contraceptive pills today use a Famy Care product. 1 It is the world’s largest producer of generic OCPs, with four high quality manufacturing facilities in India, two of which have been approved by the U.S. Food and Drug Administration (FDA) and the European Union.
“This transaction especially complements Mylan’s pending acquisition of Abbott’s non-U.S. developed markets specialty and branded generics business, which also includes a women’s health care portfolio and sales and marketing capabilities.
“Additionally, the acquisition of the Famy Care businesses will make Mylan a hormonal contraceptives leader in high-growth emerging markets around the world,” it added.
The acquisition is expected to be immediately accretive to Mylan’s adjusted diluted earnings per share and growth profile upon closing, the US company said.
The transaction is expected to close in the second half of 2015, subject to regulatory approvals and certain closing conditions.
Mylan CEO Heather Bresch commented, “In 2008, Mylan established a partnership with Famy Care, significantly enhancing its presence in the women’s health care segment in the U.S. and other developed country markets. With today’s acquisition, we are building on this successful partnership and further accelerating our global growth in this important therapeutic area. We see many opportunities to tap the large women’s health care market in Europe, particularly through our pending Abbott deal; the prospect of driving additional value from this business in North America; and exciting growth potential in emerging markets.”
Famy Care is the first generics company to have received prequalification from the World Health Organization for hormonal contraceptives. This manufacturing base represents one of the lowest cost and largest dedicated to OCPs globally, and brings Mylan strong capabilities in OCP cycles, injectables, IUDs and tubal rings. Famy Care has a strong presence in the private, institutional and non-governmental organization sectors and markets its products in more than 90 countries around the world.
Mylan President Rajiv Malik added, “Famy Care brings us a broad portfolio, strong technical capabilities and dedicated hormone manufacturing, which complement Mylan’s powerful global commercial footprint and supply chain infrastructure.”
He also said the deal would strengthen Mylan’s position in emerging markets, where it has a strong presence in antiretroviral business.
“Finally, we see opportunities for generating more front-end sales, in addition to Famy Care’s successful partnering strategy, as a result of our exceptional global infrastructure.”
Commenting on the transaction, J.P. Taparia, non-executive chairman of Famy Care, said, “This transaction represents a significant milestone for Famy Care and its employees, who have created a world- class women’s health care franchise. We foresee significant opportunities in the women’s health care business across developed and emerging markets, and the proposed transaction provides an opportunity for our team to capture the opportunity in an even more effective manner.”
Famy Care and Mylan have been dealing with each other since 2008.
Famy Care has investment from pan-Asian private equity firm, AIF Capital Limited.
“Shareholders of Famy Care will evaluate and pursue other opportunities in the residual Famy Care business outside of women’s health care segment,” Taparia said.
Mylan and Famy Care have an exclusive partnership dating to 2008, under which Famy Care develops and supplies OCP products to Mylan for distribution to customers in the U.S. and certain other markets. In the U.S., Famy Care and Mylan have a portfolio of 12 approved products, with abbreviated new drug applications pending FDA approval for 30 products.
The global women’s health care market is growing at a compound annual rate of approximately 6% 2 , with hormonal contraceptives representing the largest and fastest growing products in the segment.
“Lower oral contraceptive penetration rates in emerging markets represent an important growth opportunity, and this opportunity is supported by global initiatives, such as Family Planning 2020, which provide funding for contraceptive access in these markets,” Mylan said.
Under the proposed transaction structure, Famy Care will spin off its female health care businesses under a court approved scheme of demerger. Post demerger, Mylan will acquire the shares of the new resulting company.