Reverberations of the high-decibel Mylan-Agila deal, which happened towards the end of February, have not faded away from the Indian CMO stage.

A noteworthy acquisition, which got probably missed in the clamor, is the U.S. generic maker’s strategic buyout of another Indian manufacturing facility, this one an API supplier.

In this not-so-big deal, Mylan paid $32.5 million to acquire a factory owned by SMS Pharmaceuticals. Located in Vizag in southern India, the U.S. FDA-approved unit makes a range of oncology APIs through finished injectables.

Soon after, the news of Mylan’s $1.6 billion dollar buy of Agila Specialties, the Bangalore-based injectables firm came up, side-stepping other events. According to the headlines, the importance of Agila buy was that it would instantly catapult Mylan to the number one slot in the injectables marketplace by boosting its capacity 50 times overnight.

One of the world’s largest generic players, Mylan has been expanding its manufacturing capacities while actively hunting for knowhow to produce specialized injectable formulations cost-effectively.

Nine more manufacturing plants from Agila, spread across India, Brazil and Poland, will considerably beef up the company’s capacities and enable it to meet the increasing demands of contracting and technical needs.

Even as the Agila acquisition promises Mylan an upper hand in a whole gamut of finished products including oncology, cephalosporins, penicillin, penems and controlled substances, the company is still in the lookout for source points that can ensure a seamless supply of raw materials. Pure-play API makers are in short supply because most CMOs these days are increasingly forward-integrating into “more lucrative” formulations business.

Mylan’s Love
Mylan has been in hot pursuit of API assets in India. The company even went on record saying that it was ready to own a setup paying as much as $33 million from Unichem, a Mumbai-based firm, reports said.

Mylan’s quest for Indian APIs is not new. In fact, the company’s interest in the world’s generic powerhouse grew with the 2006 purchase of a 70% stake in Matrix Labs, an API producer with 10 manufacturing facilities. Three years later, the company entered a product licensing agreement with Natco Pharma of Hyderabad to produce a generic of Teva’s MS drug, Capaxone.

Even after going on a buying spree with big ticket acquisitions of Merck Generics and Bioniche, Mylan’s enthusiasm for India remained unflinching. It kept on revisiting the subcontinent. In mid-February, Mylan expanded its existing partnership with Biocon to include a portfolio of insulin analogs. The company’s earlier contract with India’s top biotherapeutics firm, signed in 2009, involved biosimilar development. The new deal covers the development and commercialization of Biocon’s Glargine (generic of Sanofi’s Lantus), Lispro (Eli Lilly’s Humalog) and Aspart (Novo Nordisk’s NovoLog). These three complex, high-value biologics clocked total sales of around $11.5 billion worldwide in 2012, according to a Biocon statement.

Mylan exemplifies the fact that reliable partners that can maintain a steady supply of cost-competitive APIs are crucial to success in generics. It is also worth recalling that Hospira went on to buy an API unit along with an R&D center engaged in developing low-cost manufacturing technologies for $200 million in August last year, as a follow up of its $400 million purchase of Orchid’s antibiotics injectables division in 2010.

Excipient Forays
Companies are also buying into inactive ingredients as well, as recent deal activities show. In February, Netherlands-based IMCD Group BV acquired Indchem International, an excipients supplier from Mumbai. The first-of-its-kind acquisition is intended to make IMCD India a one-stop solution for all formulation needs by combining the technical expertise and network.

“Indchem is a reputable player in the pharmaceutical market and their portfolio perfectly complements ours in India. With our group network and technical expertise, we will be well positioned to better serve our customers throughout India,” said Vijay Ranshinge, MD, IMCD India, in a press statement.

Drugmakers come looking for pharma ingredients in India, as the country is home for hundreds of manufacturing facilities bearing the stamp of approval from various global regulatory agencies, including U.S. and Europe, and more than double the number of units having clearance for GMP standards set by WHO. These numbers are steadily increasing as more and more CMOs upgrade their factories to global benchmarks.

The quality of APIs, especially those exported overseas, is also ascertained through interventions by regulators. In March, for instance, the Central Drugs and Standards Control organization, India’s drug regulator’s office, mandated Written Confirmation (WC) certificates for export of APIs to EU.

The regulatory measure, besides assuring batch-to-batch quality of exported APIs, would also help address one of the long-standing concerns of some EU countries, blocking possible infiltration of any sub-standard quality stuff in exports.