With the help of the NY governor's office, Strides Pharma acquires new manufacturing site
An Indian biopharma has seen its US business increase accordingly as it’s expanded its portfolio, and the company is acquiring a manufacturing site on the New York/New Jersey border to up annual capacity and avoid supply chain woes.
Strides Pharma will acquire Endo’s Chestnut Ridge, NY facility and a “basket of abbreviated new drug applications,” the company announced. The acquisition will cost Strides about $24 million, and will be financed through a combination of internal accruals and debt financing. The deal is set to close in 2021.
In a statement, CEO R Ananthanarayanan said:
We believe with the combined product portfolio, experienced management team, established frontend and a diversified manufacturing footprint we have created a strong foundation to achieve our previously stated growth ambition for the market. On completion of the transaction, our immediate focus will be on seamless integration of people and the acquired assets onto Strides’ platform.
The move comes as the US has emerged as the largest market for Strides, making up 48% of 2021’s revenue. The multi-dosage facility will help the company up its annual capacity, as it has the potential to produce 2 billion units a year across semi-solid, liquid, nasal spray and oral solid dosage form. Strides is the world’s largest manufacturer of soft gelatin capsules.
Strides says the site mirrors its flagship location’s capabilities in Bengaluru, India, but with being in the US, it will be able to cater to contracts with US government procurement programs, such as the Department of Veterans’ Affairs. The company will take on 20 commercial products. The ANDAs that it has brought in will help launch its new US strategy, which includes plans for five to six new products a quarter.
Strides spun out its biotech business under Stelis in February, with the board of directors forming a committee to explore various options of “value discovery.”
With the buyout, Strides will retain 215 of the employees previously employed by Endo, add another 40 jobs and invest another $42 million over the next few years to make both brand-name and generic drugs. It will also operate as a contract manufacturer.
New York will provide the company with up to $10 million in tax credits for retaining the current employees and creating those 40 jobs.
“The Covid-19 pandemic has made clear that having domestically produced medical supplies, especially in times of crisis, is critical for a secure supply chain and a safer New York,” Gov. Kathy Hochul said in a press release. “I am pleased that Strides Pharma, Inc will expand in the Mid-Hudson region, creating good paying jobs and investing in the state’s economy.”