(Reuters) - Generic injectable drugs maker Sagent Pharmaceuticals Inc SGNT.O is looking to shore up its portfolio with deals worth up to $500 million, as rampant manufacturing issues and quality concerns push consolidation in the industry.
Cancer drugs, anti-infectives and treatments that can be sold directly to hospitals are of key interest to the company that has remained relatively unscathed by the regulatory problems in the sector, Sagent Chief Executive Jeffrey Yordon said in an interview.
“For the first time, we want to take on some very focused proprietary products that need small salesforces,” the CEO said.
“A lot of bigger companies have developed products that are probably a little too small, they may be in the $50 million (in sales) category. Those are the products that we have a lot of interest in.”
However, Yordon ruled out the company being part of any bidding war for an asset.
“If we are involved in a situation where it goes to auction, which many of these do, we are not in a position to overpay by 30-40 percent,” the CEO said.
Sagent, with a market capitalization of about $700 million, had about $170 million in cash and cash equivalents as of December 31, Yordon said.
The generic injectables industry, which includes Hospira Inc HSP.N, Akorn Inc (AKRX.O), Novartis’s NOVN.VX Sandoz, Mylan Inc (MYL.O) and Teva Pharmaceutical Industries Ltd (TEVA.TA), has been hit by a wave of plant shutdowns related to quality concerns.
The clamp-down by the U.S. Food and Drug Administration has resulted in drug shortages, pushing companies to consolidate.
Last year, Mylan bought India-based Strides Arcolab Ltd’s STAR.NS injectables business for $1.6 billion, while German drugmaker Boehringer Ingelheim is looking to divest its injectable business after ceasing production due to quality control issues.
Reporting by Esha Dey in Bangalore; Editing by Sriraj Kalluvila