GV Prasad, Co-Chairman and CEO, Dr. Reddys Laboratories

Dr. Reddys Laboratories has entered into a definitive agreement with Teva Pharmaceutical Industries Ltd and an affiliate of Allergan plc to acquire a portfolio of eight Abbreviated New Drug Applications (ANDAs) in the United States (US) for $350 million in cash at the closing.

Overview

• Includes products that are being divested by Teva as a precondition to its closing of the acquisition of Allergans generics business.
• The acquisition of these ANDAs is also contingent on the closing of the Teva/Allergan generics transaction and approval by the US Federal Trade Commission of Reddys as a buyer.
• Includes a mix of filed ANDAs pending approval and an approved ANDA, and comprised complex generic products across diverse dosage forms.
• The combined sales of the branded versions of the products in the US is approximately $3.5 billion MAT for the most recent twelve months ending in April 2016 according to IMS Health.
• The acquirement of the portfolio is on a cash-free, debt-free basis and expects to finance the transaction using a combination of cash on hand and available borrowings under the existing credit facilities.

Transaction – Key Takeaways

• Will add strength to Dr Reddys product portfolio
• Will assist in becoming more relevant in the US market
• Will create new opportunities for growth
• Will enhance short-to-midterm aspirations
• Will identify inorganic opportunities to expand base business

Understanding Abbreviated New Drug Applications (ANDAs)

ANDA means Abbreviated New Drug Application. This application is available at the Food and Drug Administration (FDA). An ANDA contains data that, when submitted to the FDA, provides for the review and ultimate approval of a generic drug product. Generic drug applications are called “abbreviated” because they are not required to include preclinical (animal) and clinical (human) data to establish safety and effectiveness.

Instead, a generic applicant must scientifically demonstrate that its product is bioequivalent (i.e., performs in the same manner as the original drug). Once approved, an applicant may manufacture and market the generic drug product to provide a safe, effective, low-cost alternative to the public.

For internal tracking purposes, all ANDA applications are assigned an ANDA number. The ANDA number is a six-digit number assigned by the FDA staff to each application for approval to market a generic drug in the US.

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