Injectables continue to be the top newsmaker in the Indian pharmaceutical outsourcing sector. Looking at the major India-centric CMO activities through the year, one can see injectables are the front-runners. Alliances and acquisitions involving injectable products make it big on the dealmakers’ scorecard. The potential of generic injectables is something that CMOs are pinning their hopes on while charting out their growth strategies. Whether they are acquisitions or expansions, the overall trends seem to suggest steriles manufacturing is the key driving force behind many such deals.

After reaching an agreement to acquire the injectables business from the Banagalore-based Strides Arcolab in February, Mylan said the $1.6 billion buy would catapult the company to the league of world’s leading injectables suppliers by doubling its injectable drugs portfolio. Together, the companies will have over 700 injectable products, plus a pipeline of 350 more.

Agila, Strides’ injectables arm, makes vials, prefilled syringes, ampoules, lyophilization, cytotoxics, and antibiotics. Mylan is expecting a compound growth of 13% through 2017 by bolstering Agila’s 180 million units capacity to 600 million units. Eight out of the nine  manufacturing facilities of Agila — spread across India, Brazil and Poland — have the U.S. FDA’s stamp of approval. Strides also has a large freeze-drying capacity.

Mylan has ensured uninterrupted supply of APIs through earlier deals. Presently, the company has eight plants making APIs in India. The U.S. generic maker also has product licensing agreements with Natco Pharma for Copaxone and Biocon Ltd .for insulin products.

Powering the Supply Chain
Even while eying a sizeable chunk of the global generic injectables market and taking advantage of cost-effective production technologies, Mylan plans to become the biggest local supplier of injectables in the rapidly emerging Indian market too. With nearly half of its 20,000-strong global work force located in India, Mylan sees 12-fold increase in domestic sales by 2018, the company said in a submission to Department of Industrial Policy and Promotion, seeking clearance for the deal.

Again, the growing market for low-priced injectables worldwide must have spurred Aurobindo Pharma’s recent decision to invest heavily in this vertical. In August, Aurobindo announced that the company would hive off its injectables business into a wholly owned subsidiary to explore strategic alliances and acquisitions. As a buildup, the contract manufacturer aims to expand the capacity in one of its two injectables-making facilities to $100 to $120 million per annum in the next six to eight quarters. The semi-synthetic penicillins facility has only one fourth of this capacity, at present. Thirty-one products have been filed for approval from the unit and it will reach 100 products in the next five to six quarters, according N Govinadarajan, M.D., Aurobindo. The company would bring its second factory, which has FDA approval for making ophthalmic injectables, under the ambit of the new subsidiary.

Reports said the Hyderabad, southern India-based CMO was planning to buy some additional capacities, as well. The company’s board has already given the go-ahead for investing $2.6 million to buy a 60% stake in a new manufacturing facility that Celon Laboratories is building to make hormones and oncology drugs.

High Value, Hot Pursuits
Aurobindo will invest another $5.3 million to expand that plant over the next year. The company may raise its stake in Silicon Life Sciences to 75%, which manufactures nonsterile penems. It is also looking at opportunities in the biosimilars and oncology areas, as the CMO sees the injectable business become the major part of its revenues over the next couple of years.

Catching the pulse, Zydus Cadila is also planning to add to the global supply chain of injectable drugs. The generic firm is coming up with a $160 million injectables facility at the western Indian city of Vadodara. The new factory will start producing non-oncology injectables by 2015 and initially focus on the U.S. market before getting into Brazil and Europe. Currently, Zydus Cadila has 50/50 joint venture with the U.S.-based Hospira to manufacture anticancer drugs at a plant near Ahmedabad.

Another CMO, which grabbed headlines recently, is Jubilant HollisterStier. A subsidiary of India-based Jubilant Life Sciences, the firm said in August that its manufacturing facility located at Montreal completed the first phase of an expansion with the addition of a new ampoule-filling line utilizing a rigid barrier system. The new manufacturing area will expand ampoule manufacturing capacity in Montreal by nearly two hundred percent.

It is worth recalling that Hospira signed a $400 million deal to buy the injectables formulations division of India’s Orchid Pharma in 2009 and followed it up with the acquisition of a modern betalactam APIs plant and an associated R&D center for another $200 million three years later. The Orchid-Hospira deal, probably, turned the spotlight on Indian assets alluring the CMOs hotly pursue high value injectables.