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Pfizer inks $360m deal to buy InnoPharma

Boosts position in the buoyant sterile injectables market

PfizerPfizer has boosted its position in the buoyant sterile injectables market with a $360m deal to buy the privately-held firm InnoPharma.  

Under the terms of the agreement, Pfizer will acquire New Jersey-based InnoPharma for $225m upfront, with $135m in possible milestone payments, to gain control of the company's 10 FDA-approved generics and a pipeline with 19 more products filed and 30 in development.  

Pharma companies are increasingly attracted by the sterile injectables market because while the products have tended to off-patent and low-margin, they are relatively difficult and expensive to make and so are less prone to competition than other generic dosage forms.  

Moreover, the category is prone to shortages, in part because of the exit of big pharma companies from the sector in recent years as drugs have lost patent protection, and also because of manufacturing quality issues that have interrupted supplies from companies such as Hospira and Boehringer Ingelheim's Ben Venue unit. It helps that prices and margins are also trending upwards.  

InnoPharma has tapped into this market potential with a series of products that are in short supply - and so qualify for expedited review by the FDA, have novel formulations that differentiate them in the marketplace or are hard to formulate or manufacture.  

It has been steadily building capacity to make complex injectables such as pen injectors and depot formulations and latterly has been expanding into other dosage forms such as oral suspensions and intranasal formulations.  

"We continue to look for innovative growth opportunities for our sterile injectables portfolio, which will increase to 73 products with this acquisition," commented John Young, president of Pfizer's Established Pharma division which was set up last July, some believe as a preamble to a spin-out.  

Pfizer is only the latest company to boost its position in sterile injectables, with a string of other acquisitions and partnerships signed over the last few months, including a deal announced this week between India's Sun Pharma and Pharmalucence, which has a sterile injectable unit in the US.  

Other notable M&A activity in the sector includes Par Pharma's $490m deal to buy JHP Pharmaceuticals in January, Lupin Laboratories' agreement to buy Nanomi of the Netherlands the following month  and Hikma's $300m purchase of Boehringer's Bedford unit in May.

Last year, generics giant Mylan made a big leap forward in the sector with a $1.6bn agreement to buy Strides Arcolab's sterile injectables unit Agila, while Becton Dickinson has been steadily building a presence in the market with plans to launch up to 30 product lines in the coming years.

Article by
Phil Taylor

17th July 2014

From: Sales

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