Alpharma ties up with H'bad firm

To set up India facility.

Alpharma, the largest active pharmaceutical ingredient (API) manufacturer in the world, will soon set up manufacturing facilities in India by teaming up with Hyderabad-based SMS Pharmaceuticals, an upcoming API and drug intermediate manufacturer, which was listed in February last year.

The Denmark-based company is in the final stages of forming a joint venture to manufacture cancer drugs initially and will invest over $ 50 million (Rs 200 crore) in the first phase.

The JV will also help SMS begin manufacturing finished drug formulations, utlising the global marketing skills and infrastructure of Alpharma, informed sources told Business Standard.

"We are in discussions with 2-3 global players to expand business and to enter into manufacturing of formulations. Talks with Alpharma are in advanced stages, but so far we have not finalised any deals," said A P Rao, director and corporate advisor, SMS Pharmaceuticals.

Ramesh Babu Potluri, chairman and managing director of SMS, could not be contacted as he was away on vacation. The deal is likely to be signed within two to three weeks, sources said.

The more than a century-old Alpharma currently has five manufacturing facilities in Oslo (Norway), Copenhagen (Denmark), Budapest (Hungary), Taiwan and China.

The company manufactures about 14 APIs and supplies to almost all the leading drug makers worldwide. It had sales of $168 million from APIs alone in 2006.

Alpharma divested its international generics businesses in 2005 to Actavis Group for $810 million to focus more on APIs and specialty drug production. The company already has Indian business connections such as a supply pact with Mumbai-based API manufacturer Hikal.