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Listed drug maker Strides Arcolab on Thursday said it had completed the sale of Agila Specialties to Nasdaq-listed Mylan for $1.75 billion.
The conclusion of the deal, announced in late February, was delayed as a Strides unit came under the US Food and Drug Administration (FDA)’s scanner. Of the $1.75 billion, Mylan will pay $250 million later if an injectables unit of Agila in Bangalore that received a warning letter from the US regulator meets the norms.
Strides Arcolab tanked 14.5 per cent on the BSE to Rs 843 and 14.54 per cent on the National Stock Exchange to Rs 841.55 on Thursday.
Strides said: “Consequent to the warning letter received by the company for one of its units in Bangalore, Strides has agreed to a hold back of $250 million. The company expects those contingent conditions will be satisfied some time in 2014.”
The Indian drug maker added since the initial announcement of the deal, it now expected an additional expenditure of $150 million. “This includes cost towards acquisition of additional assets from its erstwhile partners and an estimated remediation cost related to its regulatory commitments after the warning letter,” it said. This comes as a setback to the shareholders as the Strides’ management had earlier indicated $700-800 million would be distributed as dividend. Strides has said it would reveal the final dividend after a board meeting on December 10.
Mylan had said Agila would bring a portfolio of 300 global filings , including 61 abbreviated new drug applications in the US, and a marketing network covering 75 countries. After the deal, the 1,800 staff of Strides would be on Mylan’s rolls.
Agila makes drugs at its nine facilities in India, Brazil and Poland. Eight of these have FDA approvals.
Strides Arcolab tanked 14.5 per cent on the BSE exchange to Rs 843 and 14.54 per cent on the National Stock Exchange to Rs 841.55 on Thursday.
