The drug maker Mylan announced on Wednesday that it was acquiring Agila Specialties Private Ltd., an Indian manufacturer of generic injectable drugs, for $1.6 billion in cash.
The move would double Mylan’s presence in the injectable-drug market, a fast-growing segment of the generic drug industry that nevertheless has been beset by major quality and supply problems in recent years.
Mylan’s chief executive, Heather Bresch, said in a telephone interview Wednesday that the acquisition, expected to be completed in the fourth quarter of this year, would help expand the company’s presence in emerging overseas markets and establish it as a major player in the injectables market, which the company said is expected to grow by 13 percent a year through 2017.
Despite this growth, however, most major manufacturers of injectable drugs have suffered frm serious supply and quality problems in recent years, leading to recalls and a nationwide shortage of critical products like chemotherapy drugs.
Ms. Bresch said Mylan’s recognizable brand - it is the world’s fourth-largest maker of generic drugs - will set it apart from its competitors.
“Our ability to bring real quality leadership in this space is our real opportunity,†she said.
In the past, the injectable business was so competitive that companies drove prices too low, said Rajiv Malik, Mylan’s president. But now that several large manufacturers â€" including Hospira, Sandoz and Teva - have invested millions of dollars in upgrading their plants, that picture has changed.
“I think they won’t be chasing the floor anymore anytime soon,†he said.
Mylan is acquiring Agila from the Indian pharmaceutical company ! Strides Arcolab Ltd. Agila, which is based in Bangalore, sells more than 300 products worldwide, including 61 drugs in the United States. It has nine manufacturing facilities in India, Poland and Brazil, and Mylan says the company has a strong presence in emerging markets like Brazil.
Mylan said it had received a commitment letter from Morgan Stanley for a new $1 billion senior unsecured bridge term loan, which would be used in combination with the company’s existing cash and other lines of credit to pay for the acquisition.
Morgan Stanley is serving as financial adviser to Mylan, and Skadden, Arps, Slate, Meagher & Flom is the legal adviser, assisted by Slaughter and May and Platinum Partners.
