LAKE FOREST, Ill., Aug. 29, 2012 /PRNewswire/ -- Hospira, Inc.
(NYSE: HSP), the world's leading provider of injectable drugs and
infusion technologies, today announced an agreement for Hospira to
acquire an active pharmaceutical ingredient (API) manufacturing
facility, together with an associated research and development
(R&D) facility, from Orchid Chemicals & Pharmaceuticals
Ltd. (BSE: 524372, NSE: ORCHIDCHEM), a leading Indian
pharmaceuticals company, for approximately $200 million. Acquisition of the modern, U.S.
Food and Drug Administration (FDA)-approved facility is expected to
reduce Hospira's costs, support continuity of supply of key
antibiotic products and pave the way for future API
development.
"Our decision to acquire Orchid's world-class API facility
demonstrates Hospira's continued dedication to the antibiotics
space, enhancing cost-competitiveness and ensuring continuity of
supply," said Dr. C. Bhaktavatsala Rao, managing director, Hospira
India. "This is a top-of-the-line API manufacturing facility that
has been recognized by industry leaders for its high standards. We
look forward to welcoming our new colleagues from Orchid and
leveraging their expertise to continue to bring high quality,
lower-cost products to patients around the world."
The proposed acquisition, which follows Hospira's 2010 purchase
of Orchid's generic injectable finished-dosage form pharmaceuticals
business, will enable Hospira to vertically integrate into certain
critical beta-lactam antibiotic APIs (penems and penicillins), and
is also expected to improve Hospira's standard cost position in
this therapeutic space. In addition, controlling the source of
these beta-lactam APIs will improve the company's security of
supply. Orchid will retain its cephalosporin API business and
facilities, and will continue to supply Hospira with this
associated API.
The Aurangabad, India,
facility, staffed by approximately 640 employees including
chemists, engineers and technicians, received the International
Society of Pharmaceutical Engineering's (ISPE) Facility of the Year
Award for Regional Excellence in 2009. Constructed in 2000, the
facility includes 50,000 square meters of space. Hospira's purchase
also includes an associated Orchid R&D facility based in
Chennai that will be primarily
directed to beta-lactam and other APIs with approximately 160
scientific personnel and an additional 30 employees supporting the
facilities.
Beta-lactam antibiotics represent a class of drugs with a wide
spectrum of antibacterial activity. Hospira's imipenem-cilastatin
and meropenem injectable beta-lactams have both had successful
introductions recently in a number of markets, including
Europe and the United States, and today command leading
market positions.
Transaction Details
The transaction has been unanimously approved by Hospira's and
Orchid's boards of directors. It is subject to Orchid's
shareholders', regulatory and legal approvals, as well as customary
closing conditions. Assuming all necessary approvals are secured,
the transaction is expected to be completed in the fourth quarter
of 2012. To help facilitate the transition process, the two
companies will enter into transitional services agreements of
various lengths.
Financials
The transaction is expected to be breakeven to slightly
accretive to earnings per share (EPS) in the first year post
close, excluding the impact of transaction-related expenses, such
as purchase accounting charges, integration costs, and the
amortization of intangible assets.
About Hospira
Hospira, Inc. is the world's leading provider of injectable
drugs and infusion technologies. Through its broad, integrated
portfolio, Hospira is uniquely positioned to Advance Wellness™ by
improving patient and caregiver safety while reducing healthcare
costs. The company is headquartered in Lake Forest, Ill., and has approximately
15,000 employees. Learn more at www.hospira.com.
Hospira Healthcare India Private Limited ("Hospira India") is
the wholly owned subsidiary in India of Hospira, Inc.
Private Securities Litigation Reform Act of 1995 --
A Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding Hospira's proposed agreement
to acquire an active pharmaceutical ingredient manufacturing and
R&D facility. Hospira cautions that these forward-looking
statements are subject to risks and uncertainties that may cause
actual results to differ materially from those indicated in the
forward-looking statements. Economic, competitive, governmental,
regulatory, legal, technological, manufacturing supply, quality and
other factors that may affect Hospira's operations and may cause
actual results to be materially different from expectations include
the risks, uncertainties and factors discussed under the headings
"Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in Hospira's latest
Annual Report on Form 10-K and subsequent Forms 10-Q, filed with
the Securities and Exchange Commission, which are incorporated by
reference. Hospira undertakes no obligation to release publicly any
revisions to forward-looking statements as the result of subsequent
events or developments.
SOURCE Hospira, Inc.