Lupin to expand US generic business with acquisition of GAVIS Pharma

Indian drugmaker Lupin (BSE: 500257) has entered into a definitive agreement to acquire privately held GAVIS Pharmaceuticals and Novel Laboratories (GAVIS), subject to certain closing conditions, in a transaction valued at $880 million, cash free and debt free.

Investors were less than impressed, with Lupin’s shares falling 5.25% to 1,728.25 rupees on the news, which coincided with the Indian drugmaker reporting a 15.96% fall in its consolidated net profit at 5,250.2 million rupees ($82.7 million) for the quarter ended June 30, mainly on account of decline in its overseas sales.

The transaction has been unanimously approved by the boards of directors of Lupin and GAVIS. The acquisition enhances Lupin's scale in the US generic market and also broadens Lupin's pipeline in dermatology, controlled substance products and other high-value and niche generics. GAVIS brings to Lupin a highly skilled US based R&D organization which would complement Lupin's Coral Springs, Florida, inhalation R&D center. GAVIS's New Jersey based manufacturing facility will become Lupin's first manufacturing site in the USA.