Hospira acquires Orchid's injectables formulations business

Hospira, Inc. (NYSE: HSP), the world leader in generic injectable pharmaceuticals, today announced it has completed the acquisition of the generic injectable pharmaceuticals business of Orchid Chemicals & Pharmaceuticals Ltd. (BSE: 524372, NSE: ORCHIDCHEM), a leading Indian pharmaceuticals company, for approximately $400 million.

"We are excited to acquire new capabilities that will create opportunities for commercial growth, position us strongly in a key antibiotics product area, expand our global footprint and enhance our ability to provide lower-cost, high-quality products to patients," said Terry Kearney, chief operating officer, Hospira. "We're also excited to welcome a talented base of 450 employees, including newly appointed managing director, Hospira India, Dr. C.B. Rao, who joins us with a wealth of diversified industrial and management experience, and will provide continuity of leadership for the Orchid team joining Hospira."

Rao will report directly to Kearney.

"Integration of Orchid's injectables formulations business with Hospira, the global leader in generic injectables, represents a strong strategic fit. Our team is committed to leveraging our world-class infrastructure, high-technology product range and organizational competencies to drive even greater business growth and strengthen Hospira's leadership position," said Rao.

The acquisition includes Orchid's beta-lactam antibiotic formulations manufacturing complex (comprising cephalosporin, penicillin and carbapenem facilities) and pharmaceutical research and development (R&D) facility at Irungattukottai, Chennai, as well as its generic injectable dosage-form product portfolio and pipeline. Beta-lactam antibiotics represent a class of drugs with a wide spectrum of antibacterial activity, and Orchid is one of the top-five generic beta-lactam antibiotics manufacturers globally.

In addition, the companies signed a long-term agreement for Orchid to supply active pharmaceutical ingredients (APIs) for the acquired generic injectable pharmaceuticals business.  

Hospira and Orchid are committed to supporting the various alliances and distribution arrangements of the acquired business. To help facilitate the transition process, the two companies have entered into transitional services agreements for approximately 15 months.

Hospira expects to provide more specific information on the financial impact of the transaction when it reports first-quarter 2010 results on April 27.

Orchid/Hospira Partnership

In 2005, Mayne Pharma Ltd. (now part of Hospira) and Orchid entered into a strategic commercialization and development agreement.  Subsequent agreements have added to the scope of the relationship, and the acquisition gives Hospira the manufacturing/R&D capabilities, product application ownership and full commercialization rights to these products, as well as access to new product licenses and distribution partnerships.  The long-term API agreement with Orchid will also ensure continuity of supply.