Dr Reddy’s Laboratories has sold the antibiotics manufacturing facility and related assets it had acquired in Bristol, Tennessee (USA), from GlaxoSmithKline (GSK) seven years ago.
Dr Reddy’s announced the closure of the sale of this facility to United Arab Emirates-based Neopharma. The Indian company had taken steps on cost control in recent times, particularly after Israeli came in April as Chief Operating Officer (COO). It had scaled down the expense on research and development, as also capital expenditure.
In 2010, GSK and Dr Reddy’s signed an agreement to transfer the ownership of its penicillin manufacturing site and the rights for its Augmenting and Amoxil brands in the US to Dr Reddy’s. The transaction was completed in 2011. At the time, Dr Reddy’s said the acquisition was aimed at entering the US penicillin-containing market segment and increase its generics business in North America. However, commoditisation of oral penicillin in the US rendered some of the product approvals at this facility less attractive in terms of price margin, even as the firm was focusing on complex products to sustain growth and margins of its global generics business.
For Neopharma, this will be the first regulator-approved facility in the US to produce Augmentin, a frequently prescribed variant of penicillin. The plant and associated facilities focus on manufacturing or packaging Amoxicillin-based products, which include semi-synthetic penicillin. The facility is dedicated to secondary oral-solid dose penicillin manufacturing and a separate processing facility in Bristol is also included in the transaction.