DOW JONES NEWSWIRES
Hospira Inc. (HSP) agreed to a $400 million takeover of Orchid
Chemicals & Pharmaceuticals Ltd. (524372.BY) operations that
will expand Hospira's generic injectable antibiotics
operations.
The deal to buy the Indian company's generic injectable-drug
business expands on a relationship that began in 2005, when Mayne
Pharma Ltd.--now part of Hospira--and Orchid entered a
commercialization and development agreement. Hospira has been doing
well lately, shattering Wall Street expectations in the third
quarter in part due to the launch of a generic cancer agent.
The acquisition includes Orchid's beta-lactam antibiotics
manufacturing operations and a research and development facility as
well as its generic injectable product portfolio and pipeline.
Beta-lactam antibiotics--including the cephalosporin, penicillin
and carbapenem involved in this deal--represent a class of drugs
with a wide spectrum of antibacterial activity.
Orchid also agreed to supply active pharmaceutical ingredients
to the acquired businesses, and the manufacturing site has
approvals from international regulatory authorities, including the
U.S. Food and Drug Administration.
"This acquisition aligns perfectly with Hospira's strategy to
improve our margins and cash flow by lowering our cost position for
a key product line," said Chief Operating Officer Terry Kearney.
The deal will also boost its presence globally.
The transaction, seen closing in the first quarter, is expected
to be neutral to Hospira's earnings in 2010, excluding
transaction-related expenses.
Hospira shares were recently up 1.8% at $49.87. The stock is up
86% this year and hit a 52-week high earlier Tuesday.
-By Jay Miller, Dow Jones Newswires; 212-416-2355;
jay.miller@dowjones.com