Dr. Reddy’s Laboratories to acquire Mayne Pharma’s US retail generics portfolio

Dr. Reddy’s Laboratories has agreed to acquire the US generic prescription product portfolio of Mayne Pharma Group, an Australian pharma company, in a deal worth up to $105 million.

The generic drug portfolio involved in the deal includes around 45 commercial items, four pipeline products, as well as 40 non-marketed approved products, including a variety of generic drugs focusing specifically on the health of women.

In the fiscal year ended on 30 June 2022, Mayne Pharma reported total revenue of $111 million for the portfolio involved in the deal.

The approved high-value products in the portfolio include a cardiovascular device, a hormonal vaginal ring, and a birth control pill.

The acquisition will add to Dr. Reddy’s Laboratories’ US retail prescription pharmaceutical business with products that have limited competition. Besides, it will help the Indian pharma company’s efforts in expediting and expanding affordable medication for patients.

The value of the total potential market addressable for pipeline and other approved products that are not marketed within the US is approximately $3.6 billion for the calendar year that ends in December 2022, as per IQVIA.

As per the terms of the deal, Dr. Reddy’s Laboratories is expected to purchase the portfolio for an upfront fee of around $90 million in cash followed by contingent payments of up to $15 million (USD) towards credit and inventory for certain channel liabilities to be determined on the date of the deal completion.

Erez Israeli — Dr. Reddy’s Laboratories CEO said: “The U.S. has always been an important market for us. The portfolio of products acquired from Mayne Pharma is a strategic fit with our growth objectives.

“The portfolio includes some high entry-barrier products. It also complements our existing portfolio by introducing products focused on women’s health. Our strong balance sheet enables us to acquire products of strategic importance to strengthen our base business and build for long-term growth.”

Mayne Pharma said that the deal helps it transform into a specialty pharmaceutical business that holds top positions in dermatology and women’s health.

Following the completion of the deal, Mayne Pharma’s commercial operations will be focused solely around its US women’s health products, US dermatology products, as well as its international business.

After the closing of the deal, Mayne Pharma and Dr. Reddy’s Laboratories will implement a 10-year supply deal on arm’s length terms for some products that are manufactured at the former’s facility in Salisbury, South Australia.

Shawn Patrick O’Brien — Mayne Pharma CEO said: “Divesting the retail generics portfolio is an important step forward for the Company as we continue to rationalise our portfolio. With this transaction, we free up working capital, allowing us to more exclusively focus resources on core areas of value for business growth, namely our branded verticals in US women’s health and dermatology.

“We are creating a leaner Company with strong commercial and sales execution capabilities. With this transaction, we move closer to achieving our goal of generating operating cash and returning the business to profitability.”

The transaction’s closing is contingent upon the satisfaction of closing conditions that are customary, including the applicable waiting time in accordance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) as amended.