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
-- 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
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
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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