ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Strides Arcolab Ltd has completed sale of its specialties division Agila Specialties Pvt

Updated on June 3, 2016

Drug firm Strides Arcolab Ltd has completed sale of its specialties division Agila Specialties Pvt Ltd to the US-based generic drug major Mylan Inc for up to $1.75 billion. However, the company has agreed to Mylan holding back $250 million following a warning letter it received from the drug regulator US Food and Drug Administration (USFDA) for one of its injectable facilities in Bangalore.

The Bangalore-based specialties division of Strides will bring Mylan a broad product portfolio of over 300 filings approved globally and marketed via a network spanning 70 countries. These include 61 abbreviated new drug applications (ANDAs) approved by the US drug regulator. Presently, Agila produces drugs across nine manufacturing facilities in India, Brazil and Poland, eight of which have been approved by the USFDA.

Agila Specialties

· A leading global specialty injectables company focused on oncolytics, penems, penicillin, cephalosporins, and ophthalmics.

· Market-leading track record of filings and approvals, including approximately 82 approvals from the US FDA.

· Nine world-class global manufacturing facilities, including one of the largest sterile capacities in India and amongst the largest lyophilisation capacities globally.

· Marketing network covering 70 countries.

Agila Biotech

· Agila Biotech marks the company’s foray into the biologics space.

· Biologics represent the fastest growing market segment in Pharma accounting for six out of top ten selling global drugs, with patents on first generation biologics expiring by 2020.

· Next-generation biologics facility in Johor, Malaysia – an advanced end-to-end multi-product facility for the production of recombinant therapeutic proteins and monoclonal antibodies (mAbs) from drug substance to drug product in vials, pre-filled syringes and lyophilised products. Expected to come on-stream by end-2014, with significant capacity already advance booked for partner operations.

· R&D facility in Bangalore capable of handling high-end research activities, catering to an internal pipeline as well as partnering activities.

· Developing an internal pipeline of biosimilars, utilising the latest bacterial and mammalian expression systems.

Pharma Generics

· Leading generics platform focused on soft gelatin and immune suppressants for the US and European markets.

· Strong R&D capabilities with US FDA approved manufacturing infrastructure.

· Exhaustive pipeline focused on products with high entry barriers to drive growth.

Africa Business

· Leading sales and marketing platform for branded generic pharmaceuticals and over-the-counter medicines across Central and Sub-Saharan Africa.

· Growth driven by launch of new products, expansion into new markets, and establishing local manufacturing.

India Brands

· Emerging as a regional player in Southern India in niche branded pharmaceutical products.

· Portfolio of recognized brands in fast growing therapeutic segments.


The company will be receiving an aggregate sum of US$1,600 million in cash and potential additional consideration of up to US$250 million. Of this the company will be retiring $250 million of the remaining debt to make the company debt free. The company will retain $200 million — $100 million for developing our biotech unit which is in start-up mode, and another $100 million for reps and warrants. The latter component will be repaid to shareholders after a few years. The company has set aside that amount towards minority interest and a one-time payout to employees. The latter component is up to $50 million though not yet frozen. About 1,700-odd employees will now move on with Mylan, leaving 600-700 people with existing businesses.


Based on the results for FY’12 for Agila division i.e. revenues of INR 1, 365 Cr. and EBIDTA of INR 460 Cr., Based on this the valuation turns out to be 6.3X the revenue and 18.75X the EBIDTA (not considering the potential consideration of approximately INR 1, 345 Cr.). Taking into this consideration the valuation would be 7.3X the revenue and 21.7X the EBIDTA. This is way more than the EBIDTA multiple for the complete company which as on March 20, 2013 is close to 13X.

The major reason for this sluggish performance can be analyzed from the figures below –

As can be seen from above figures, Agila was main contributor towards revenue and EBIDTA. Though they have sold at a very high premium, considering Agila was Crown Jewel of the company and letting that go without having established other business lines to that magnitude certainly raises doubts in the minds of the shareholders for their expectations of the returns on investments from the company. Hence looking from that perspective the fall in share price made sense.

Future Perspective

Going ahead the company is left with the pharma division which as of now contributes 40% towards total revenues. The company will continue to operate in this business in India and Africa. The company is also banking on success of their launch of new products in the US market. The company will also focus on developing a fully integrated biotech business which is in startup mode and will be funded from amount received from this transaction. This division has a strong focus on R&D for which they have employed more than 350 scientists for new product developments and filling of patents.


With the sale of major business, Strides Arcolab is looking to build upon their other business i.e. pharma division. The company needs to scale up the remaining business to levels so as to achieve the required rate of return that they promised to the shareholders for them to stick to the company. The company has the required resources i.e. human capability and capital to deploy for scaling up the business. Now it depends upon the management as to how to achieve the given targets.


    0 of 8192 characters used
    Post Comment

    No comments yet.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
    ClickscoThis is a data management platform studying reader behavior (Privacy Policy)