The deal may require regulatory approval

Claris Lifesciences, a sterile injectibles-maker, has executed multiple agreements with two Japanese companies for its infusions products business in India and the emerging markets. These pacts will bring Rs 1,050 crore into the company’s kitty.

The Ahmedabad-based company has forged a joint-venture, Claris-Otsuka, with Otsuka Pharmaceutical Factory (OPF) and Mitsui & Co. Claris will transfer its business valued at Rs 1,313 crore, covering common solutions, anti-infectives, plasma volume expanders and parenteral nutrition therapies, into the new company.

While Claris will hold 20 per cent equity in the company, OPF will hold 60 per cent and Mitsui, the remaining 20 per cent. Claris Managing Director and Chief Executive Arjun Handa will be Chairman and Claris will also appoint the Chief Executive of Claris-Otsuka.

With Claris hiving-off the infusions business into a new company where it holds only 20 per cent, it is not clear whether the deal will require clearance from the Foreign Investment Promotion Board (FIPB), as recently mandated by the Government in foreign acquisitions of existing companies. Claris representatives were not available for comment.

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As part of the deal with the Japanese companies, two of Claris’ five plants would be transferred to the new company. Besides, it would co-brand its products in India and across the emerging markets on the back of Claris’ manufacturing and marketing strength. Claris-Otsuka would also introduce OPF’s specialty products in India and the emerging markets, it added.

The new company would look to expand its product basket with speciality infusion and clinical nutrition products, businesses that account for approximately 55 per cent of Claris’ business, it added.

Claris, however, clarified that it remains focused on its speciality generic injectibles business. And that it would intensify its growth in all international markets, especially the regulated markets of US and EU, with new product launches.

Issues in US

The latest agreement comes even as Claris deals with regulatory issues in the US. Quality concerns in the US had put Claris’ relationship with Pfizer, a deal forged in 2009, under considerable strain, till it finally got terminated.

More recently though, Claris has said that it has “successfully resolved” the US Food and Drug Administration (FDA) issues and the US health regulator had lifted the import alert against its products.

Claris’ revenues for the calendar year 2011 stood at about Rs 740 crore, which was affected by the US product-quality-related developments.

The latest deal still requires shareholder and regulatory approvals. Claris shares were down close to 4 per cent on the BSE, at Rs 264 on Friday.

(This article was published on December 7, 2012)
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