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Orchid enters into business transfer agreement with Hospira

30 Aug 2012 Evaluate

Orchid Chemicals & Pharmaceuticals (Orchid) has entered into a business transfer agreement (BTA) with Hospira for the sale and transfer of Orchid’s Penicillin and Penem API business and the API facility located in Aurangabad at Maharashtra together with an associated Process R&D infrastructure located in Chennai for a total cash consideration of approximately $200 million.

This business transfer includes the related Penicillin and Penem product portfolio and pipeline. Approximately 830 employees would be transferred to Hospira, as part of this business transfer.

As some of Orchid’s API requirements for the Non-penicillin, Non-Penem, Non-cephalosporin (NPNC) business were supplied by the Aurangabad facility, Hospira will supply such NPNC API to Orchid through a long-term agreement that both companies have entered into. This agreement builds on the existing product development and commercialization relationship between Hospira and Orchid.

Besides, Orchid would continue to supply its Cephalosporin APIs to Hospira in accordance with the long-term supply contract. This business transfer agreement also demonstrates Orchid’s ability to build value in its chosen product domains and successfully monetize them to create value for the stakeholders. The proceeds from this business transfer will be utilized for de-leveraging Orchid’s debt position and also pave the entry for the company’s foray into newer product verticals.

Orchid Pharma Share Price

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