Dr. Reddy's Laboratories ($RDY), India's second-largest drugmaker, is looking to expand its R&D capabilities through a $35.7 million buyout of OctoPlus, a Dutch contract development and manufacturing organization.
OctoPlus specializes in formulation and drug delivery, and Dr. Reddy's said the acquisition will help it ramp up its development capabilities and give it a desired research base in the Netherlands. The Indian company said it expects to close its acquisition by March, and it plans to retain OctoPlus' workforce once the transaction is complete.
Last year, OctoPlus reported an $8.3 million loss on $10.1 million in income, Reuters reports, and Dr. Reddy's $35.7 million bid is about 30% above the Dutch outfit's most recent closing price.
The drugmaker is looking to expand its contract services offerings, and OctoPlus provided the perfect opportunity to do so, Dr. Reddy's said in a statement. The company plans to retain OctoPlus as a stand-alone entity under the Dr. Reddy's umbrella.
After Biolex, an OctoPlus drug-development partner, went bankrupt over the summer, the Dutch company has been looking for strategic alternatives, and this buyout is the ideal outcome, CEO Jan Egberts said in a statement. "OctoPlus' development and manufacturing platform perfectly fits with Dr. Reddy's marketing abilities," Egberts said. "OctoPlus will become Dr. Reddy's center of excellence for complex injectables with retention of our highly skilled and dedicated professionals in our Leiden facility."
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