The Hindu Business Line : Kemwell acquires Pfizer's plant in Sweden

The Swedish facility mainly produces salazopyrine, dubbed in medical circles as the `first designer drug' used to treat arthritis and IBS (irritable bowel syndrome).

Bangalore , Feb. 22

THE overseas pharma acquisitions saga continues.

Kemwell Pvt Ltd, the Bangalore-based contract manufacturer for global drug major, has acquired Pfizer's manufacturing plant in Sweden, according to Kemwell's CMD, Mr Subhash Bagaria.

The deal is to be completed next month. Without disclosing the purchase amount, Mr Bagaria said the facility in Uppsala was expected to add Rs 200 crore to Kemwell's annual turnover along with a vital European footprint for its contract manufacturing ambitions.

The deal amount would be partly raised as debt from one or two Swedish banks. The Swedish facility mainly produces salazopyrine, dubbed in medical circles as the `first designer drug' used to treat arthritis and IBS (irritable bowel syndrome). The plant is approved by the USFDA, the European EMEA and the Japanese regulator and its 170 employees will be retained.

Salazopyrine has an estimated global market of $200 million and involves just a few players. Pfizer caters to a salazopyrine market of 80 countries. The new entity, to be called Kemwell AB, would continue to make the drug for the US major while scouting for new global contract manufacturing opportunities, Mr Bagaria told Business Line.

Kemwell would continue to keep out of launching its own products.

In the long run, it would explore new contract opportunities by building links with the Uppsala University and the rich local bioscience arena there.

"Kemwell is the first Indian contract manufacturer to acquire business abroad," he said, adding, "We want to be a key contract manufacturer in the global market." Currently, its four plants in Bangalore make APIs (active pharma ingredients) and formulations — in the form of tablets, liquids, oral drops, creams and ointments — for GSK, Pfizer, Johnson & Johnson, AstraZeneca, Wyeth, Novartis, among others.

Kemwell, with a contract manufacturing service turnover of Rs 50 crore, also expects to complete its new Rs 40-crore export-oriented plant with 5-billion tablets capacity near Bangalore this year, Mr Bagaria said, and this was expected to add Rs 150 crore annually to the turnover.

The Uppsala plant, which reportedly attracted many interested players, was one of the four Swedish units of world leader Pfizer Inc, which next plans to shut its Stockholm plant in 2008.