Hospira, Inc. has completed the acquisition of an active pharmaceutical ingredient (API) manufacturing facility and an associated research and development (R&D) facility from Orchid Chemicals & Pharmaceuticals Ltd.  a pharmaceutical company based in Chennai, India,, for approximately $218 million, after settling prior advances of approximately $30 million.

The acquisition enables Hospira, a supplier of certain critical antibiotic injectable products, to vertically integrate into the beta-lactam antibiotic APIs (penems and penicillins). The acquisition is also expected to improve Hospira’s cost position in this therapeutic space. In addition, backward integration into these beta-lactam APIs will improve the company’s security of supply. Beta-lactam antibiotics represent a class of drugs with a wide spectrum of antibacterial activity.

The API manufacturing facility, which is located in Aurangabad, India, has capabilities for manufacturing sterile APIs and employs approximately 665 employees including chemists, engineers, and technicians. Hospira’s purchase also includes an associated Orchid R&D facility based in Chennai, India, that will be directed primarily to beta-lactam and other API development with approximately 110 scientific personnel.

Post deal, Orchid retains its cephalosporin API business and facilities, and also certain non-antibiotic, non-sterile businesses and facilities it owns. Orchid will continue to supply Hospira with cephalosporin APIs.

The transaction between Hospira and Orchid, announced in August 2012, has received all necessary regulatory and legal approvals.

Source: Hospira