Mylan buys Indian production unit from SMS Pharma for $33 million

Following speculation that started last month, India’s SMS Pharmaceuticals this week confirmed that it has sold its manufacturing units in Visakhapatnam, Andhra Pradesh, to US generic drugmaker Mylan Laboratories (Nasdaq: MYL) for 1.73 billion rupees ($33 million), said the company in a filing, reported by VCCircle. The unit is involved in manufacturing bulk drugs and formulations in the oncology segment.

The deal is second Indian acquisition by Mylan maker after it acquired 71.5 % stake in Matrix Laboratories, one of the world's largest suppliers of active pharmaceutical ingredients (API), in 2006 for $736 million and was rebranded under the Mylan name last year to launch the US firm’s generic drugs onto the Indian market.

SMS Pharma is focused on API manufacturing and claims to be the single largest producer of anti-ulcer products. The firm has also expanded into CRAMS and set up an oncology API and formulations manufacturing facility. The funds from sale will help SMS Pharma strengthen its existing facilities, cut interest costs and overheads, as well as improving working capital.