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(Reuters) -Hikma Pharmaceuticals said on Monday it would buy U.S.-based sterile injectables firm Custopharm in a deal worth up to $425 million, as the generic medicines maker looks to strengthen its needle-based treatments unit in the United States.
Hikma makes drugs including anaesthetics, pain medications, sedatives, neuromuscular agents and anti-infectives. The demand for these drugs shot up during the pandemic and remains strong as elective surgeries return.
"With this acquisition, Hikma will have a differentiated US portfolio of close to 130 injectable medicines - a more than fivefold increase over the last decade," said Riad Mishlawi, president of the injectables division.
The company expects Custopharm to generate more than $80 million in sales this year and boost margins of its injectables business.
Hikma in August forecast annual core operating margin in the range of 37% to 38% for its injectables business.
The London-based company said it would pay $375 million in cash and the deal would include an additional $50 million in the form of milestone-based payments. It bought Custopharm from Chicago-based Water Street Healthcare Partners.
Shares of Hikma were up 1.5% at 2,421 pence by 0707 GMT.
(Reporting by Aditi Sebastian and Pushkala Aripaka in Bengaluru; Editing by Saumyadeb Chakrabarty)