Hikma boosts injectables business with $300m deal

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Generic drug maker Hikma acquires assets from Boehringer Ingelheim's Bedford Laboratories business

London-listed Hikma Pharmaceuticals (LSE: HIK.L - news) has boosted its presence in injectable medicine after acquiring the US assets from Germany’s Boehringer Ingelheim for $300m (£179m).

Injectable medicines are drugs delivered by syringes or iintravenously, such as morphine drips, typically in hospitals or doctors' offices.

Under the terms of the deal Hikma will pay $225m upfront in cash and a further $75m over the next five years if the Bedford Laboratories reaches certain milestones.

The deal will mean that Hikma will be the biggest generic injectables company in the US, outstripping rivals Pfizer (NYSE: PFE - news) , Hospira (NYSE: HSP - news) , APP, Teva and Novartis (Xetra: NOT.DE - news) . The acquisition will add a portfolio of 84 products to Hikma’s 63 existing marketed products, creates the broadest portfolio of generic injectable products in the US market.

The injectable products include cancer treatments as well as pain, anaestehtic dosages and anti-infective vaccines.

Last year the FTSE 250 company hired bankers at Bank of America Merrill Lynch to explore a sale of its generic sterile injectables business after a series of manufacturing problems. However, the business decided against it after saying that it offered “excellent long-term growth prospects”.

Generics are copycats of branded drugs that have lost their patent protection. The global generic injectables market is estimated to exceed $12bn,with the US accounting for around $7.6bn.

“I am very excited to be making this strategically important investment in our Injectables business. Bedford’s impressive product portfolio and deep pipeline will significantly increase the scale and scope of our rapidly growing US Injectables business,” Said Darwazah, chief executive of Hikma said.

“The large number of high value, niche and differentiated products we are acquiring will strengthen our market position in the US and will benefit patients by bringing back products to the market that are currently in short supply.”

Hikma more than doubled its injectables business in 2011 with a $112m purchase from Baxter International (NYSE: BAX - news) and now analysts estimate the whole division is worth around $2bn. In 2013, sales of injectable medicines rose 14pc to $536m and were especially strong in the US, its biggest market, where they climbed 23pc to $363m.