India’s Wockhardt, which has had its financial fortunes dampened for several years by FDA-related manufacturing issues, has decided to improve its cash flow by selling a plant and portfolio of products to a competitor, a move that will raise more than $250 million.
The drugmaker will sell the plant in Baddi, Himachal Pradesh, India, a portfolio of 62 products and transfer all of the employees and operations of them to Dr. Reddy’s Laboratories for INR 1,850 crore ($260 million ).
In a filing, Wockhardt said the business being offloaded include some of its branded operations in India, as well as in Nepal, Bhutan, Sri Lanka and the Maldives. It said the business had sales of about INR 377 crore ($53 million) for the nine months that ended Dec. 31. That amounted to about 15% of its consolidated revenues for the three quarters.
The Indian company said the deal to sell more acute care drugs and focus on more valuable areas like diabetes drugs and its niche antibiotic portfolio which includes work on drugs against superbugs. The FDA has given five of its candidates Qualified Infectious Diseases Program status.
“The divestment will also ensure adequate liquidity to bring in robust growth in the chronic domestic branded business, international operations, investments in biosimilars for the U.S.” and other R&D, Wockhardt Chairman and founder Habil Khorakiwala said in a statement.