Dr. Reddys Laboratories to Acquire Mayne Pharma’s US Generic Prescription Product Portfolio for $105 million

Dr. Reddys Laboratories (DRL), a Hyderabad-based pharmaceutical company, has signed a definitive agreement to acquire the US generic prescription product portfolio of Mayne Pharma Group, an Australian-based pharmaceutical company, for an upfront payment of $90 million and contingent payments of up to $15 million. The acquisition is expected to complement DRL’s US retail prescription pharmaceutical business and introduce products focused on women’s health.
Details of the Acquisition
The portfolio acquired by DRL includes approximately 45 commercial products, four pipeline products, and 40 approved non-marketed products, with a total addressable market value of $3.6 billion for the calendar year ending December 2022. The portfolio also includes high-value products, such as a hormonal vaginal ring, a birth control pill, and a cardiovascular product. Mayne Pharma reported total revenue of $111 million for the acquired portfolio for the financial period ending June 30, 2022.
The acquisition will be made by DRL SA, a wholly owned subsidiary of DRL, and is subject to customary closing conditions, including the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), as amended.
Strategic Fit
The acquisition aligns with DRL’s growth objectives and introduces high entry-barrier products, complementing its existing portfolio. The US market has always been important for DRL, and the acquisition strengthens its base business and builds long-term growth. The timing of the acquisition is crucial, as the US generic market is facing headwinds due to an increasing number of filers per generic drug, higher price erosion, and cost escalation on raw materials, power, and transportation. The acquisition will enable DRL to pick product filings and launch niche and differentiated products, away from the crowd, and build a franchise on the specialty side, where there are barriers to entry.
CEO Statements
Erez Israeli, CEO of DRL, said that the acquisition is a strategic fit with DRL’s growth objectives and introduces products focused on women’s health. Marc Kikuchi, CEO of North American business at DRL, said that the acquisition provides the company’s North American organization with a significant foothold in the women’s health space and is in line with the company’s stated strategy to enhance its portfolio in its chosen growth markets.
Conclusion
The acquisition of Mayne Pharma’s US generic prescription product portfolio by DRL for an upfront payment of $90 million and contingent payments of up to $15 million will complement DRL’s US retail prescription pharmaceutical business and introduce products focused on women’s health. The acquisition aligns with DRL’s growth objectives and enables the company to pick product filings and launch niche and differentiated products in a market facing headwinds.