Hospira To Acquire Orchid's Generic Injectable Pharmaceuticals Business

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16th December 2009, 09:10am - Views: 873






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MEDIA RELEASE PR37602


Hospira to Acquire Orchid's Generic Injectable Pharmaceuticals Business


LAKE FOREST, Ill. and CHENNAI, Dec. 16 /PRNewswire-AsiaNet/ --


-- Strengthens Hospira's Manufacturing, Research and Development Capabilities; 

Enhances Orchid's Financial Flexibility to Pursue New Growth Opportunities --

    

    Hospira, Inc. (NYSE: HSP), the world leader in generic injectable

pharmaceuticals, and Orchid Chemicals & Pharmaceuticals Ltd. (BSE: 524372, NSE:

ORCHIDCHEM), a leading Indian pharmaceuticals company and among the top-five generic

beta-lactam antibiotics manufacturers globally, today announced an agreement for

Hospira to acquire Orchid's generic injectable finished-dosage form pharmaceuticals

business for approximately $400 million. 


    The acquisition includes Orchid's beta-lactam antibiotics manufacturing complex

(comprising cephalosporin, penicillin and carbapenem facilities) and pharmaceutical

research and development (R&D) facility at Irungattukottai, Chennai, as well as its

generic injectable product portfolio and pipeline. Beta-lactam antibiotics represent

a class of drugs with a wide spectrum of antibacterial activity. 


    In addition, the companies signed a long-term exclusive agreement for Orchid to

supply active pharmaceutical ingredients (APIs) for the acquired generic injectable

pharmaceuticals business.  This agreement builds on the existing product development

and commercialization relationship between Hospira and Orchid.


    Through this transaction, Hospira:

    -- Acquires a proven-quality, cost-competitive generic injectables 

       manufacturing site that has approvals from international 

       regulatory authorities, including the U.S. Food and Drug 

       Administration; the associated R&D facility and a talented base 

       of approximately 450 employees dedicated to the development and 

       production of beta-lactam antibiotics;

    -- Secures full ownership of Hospira's primary beta-lactam portfolio 

       and pipeline that were previously part of a commercialization 

       agreement with Orchid; and

    -- Establishes a direct presence in India, providing a platform for 

       future commercial growth.



    "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, and to invest

for growth, by expanding our presence globally and reinforcing our leadership

position in generic injectables," said Terry Kearney, chief operating officer,

Hospira. "Orchid's quality, speed to market and productivity are hallmarks of its

business. We look forward to welcoming our new colleagues from Orchid and leveraging

their collective knowledge to meet the evolving needs of Hospira's customers." 


    Through this transaction, Orchid:

    -- Underlines its ability to develop value-added, niche skill-sets 

       in the global pharmaceuticals value chain, and monetize them;

    -- Further fortifies its business model with long-term contractual 

       API revenue streams; 

    -- Enhances its financial flexibility to pursue new growth 

       opportunities; and

Culture International Hospira, Inc. 3 image

    -- Creates a roadmap to continue delivering shareholder value. 



    "This transaction and the long-term API contract are a testimony to the

competitiveness of Orchid's product portfolio in the global pharmaceuticals

landscape, and its established capabilities in aseptic product manufacture.  We are

confident that Hospira will take our generic injectable pharmaceuticals business to

even greater heights and provide enhanced career prospects to the employees being

transferred.  This transaction will provide Orchid with the financial flexibility to

pursue new growth opportunities, and build upon our successful track record of value

creation for our shareholders," said Mr K Raghavendra Rao, managing director, Orchid.


    Hospira and Orchid are committed to supporting the various current alliances and

distribution arrangements of the acquired business.


    Orchid/Hospira Partnership

    In 2005, Mayne Pharma Ltd. (now part of Hospira) and Orchid entered into a

strategic commercialization and development agreement.  Subsequent agreements have

added to the scope of the relationship, and the acquisition announced today gives

Hospira the manufacturing/R&D capabilities, product application ownership and full

commercialization rights to these products, as well as access to new product licenses

and distribution partnerships.  The long-term API agreement with Orchid will also

ensure continuity of supply. 


    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 first quarter of 2010. To help

facilitate the transition process, the two companies will enter into transitional

services agreements for approximately 12 months.


    Financials 

    The transaction is expected to be EPS neutral for Hospira in 2010, excluding the

impact of transaction-related expenses, such as purchase accounting charges and

integration costs, and the amortization of intangible assets.  


    Advisors 

    Morgan Stanley is acting as financial advisor, Baker & McKenzie LLP as

international legal advisor and Khaitan & Co. as Indian legal advisor to Hospira.


    Citigroup Global Markets India Private Limited is acting as financial advisor,

Latham & Watkins LLP as international legal advisor and Crawford Bayley & Co. as

Indian legal advisor to Orchid.


    Webcast 

    Hospira will host a conference call for investors and media at 11 a.m. Central

Time on Tuesday, Dec. 15, 2009. A live webcast of the conference call will be

available at www.hospirainvestor.com. Listeners should log on approximately 10

minutes in advance to ensure proper computer setup for receiving the webcast. A

replay will be available on the Hospira Web site for 30 days following the call.


    About Hospira

    Hospira, Inc. is a global specialty pharmaceutical and medication delivery

company dedicated to Advancing Wellness(TM). As the world leader in specialty generic

injectable pharmaceuticals, Hospira offers one of the broadest portfolios of generic

acute-care and oncology injectables, as well as integrated infusion therapy and

medication management solutions. Through its products, Hospira helps improve the

safety, cost and productivity of patient care. The company is headquartered in Lake

Forest, Ill., USA, and has approximately 14,000 employees. Learn more at



    About Orchid

    Orchid Chemicals & Pharmaceuticals Ltd. is a leading pharmaceutical company

headquartered in Chennai, India, involved in the development, manufacture and

Culture International Hospira, Inc. 4 image

marketing of diverse bulk actives, formulations and nutraceuticals. With exports

spanning more than 75 countries, Orchid is the largest manufacturer-exporter of

cephalosporin bulk actives in India and is ranked amongst the Top 5-cephalosporin

producers in the world. Orchid's world-class manufacturing infrastructure includes

multiple USFDA compliant API and dosage form facilities at Chennai and Aurangabad in

India. Orchid has dedicated state-of-the-art GLP compliant R&D centres for API

research, drug discovery and pharmaceutical research at Chennai, India. Orchid has

ISO 9001:2000, ISO 14001 and OHSAS 18001 certifications. Orchid is listed on the

National Stock Exchange (NSE), Bombay Stock Exchange (BSE) and the Madras Stock

Exchange (MSE) in India. Additional information is available at the company's website



    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. 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, technological 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 Hospira's subsequent Quarterly Reports on Form 10-Q, which are filed

with the Securities and Exchange Commission, and incorporated by reference. Hospira

undertakes no obligation to release publicly any revisions to forward-looking

statements as the result of subsequent events or developments.


    Orchid Safe Harbour

    This media release includes forward-looking statements and indications, which are

based on current expectations and forecasts about future events. Such statements and

indications involve known and unknown risks, uncertainties and other factors and may

cause actual results to materially differ. Such factors include, but are not limited

to, changes in local and global economic conditions, Orchid's ability to successfully

implement strategies, the market acceptance and demand of Orchid's products and

services, Orchid's growth rates, expansion, technological change and Orchid's

exposure to market risks. By their nature, these statements and indications are only

estimates and actual results could differ from these in the future.



SOURCE: Hospira, Inc.


    CONTACT:  Media, 

              Stacey Eisen, 

              +1-224-212-2276, 

         

              or Tareta Adams, 

              +1-224-212-2535, 


              or Financial Community, 

              Karen King, 

              +1-224-212-2711, 

              all of Hospira, Inc.; 


              or Ch. Ram, 

              Corporate Communications & Investor Relations of Orchid,

              +91-44-28244908, 

              ram@orchidpharma.com



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