Pharmaceuticals major Dr Reddy’s Laboratories is acquiring OctoPlus, a Netherlands-based specialty pharmaceuticals company, for €27.4 million (about Rs192 crore) in an all-cash deal.
The Indian firm is keen on the loss making company’s drug delivery technologies that can be used for taking some of its products forward.
OctoPlus reported a loss of about €5.8 million over a revenue of about €4.8 million for the first six months of the current calendar year.
“OctoPlus’s expertise in injectable specialty generics such as liposomes and microspheres is interesting and its ability to improve the formulations of both existing and new drugs is believed to be complementary to Dr Reddy’s existing capabilities,” Dr Reddy’s said in a statement.
Euronext-listed OctoPlus focuses on development and manufacture of injectable pharmaceuticals based on proprietary drug delivery technologies that are believed to exhibit fewer side effects, improved patient convenience and better efficacy.
It also focuses on the development of long-acting, controlled release versions of the known protein therapeutics, peptides and small molecules, including specialty generics.
OctoPlus and Dr Reddy’s are also entering an agreement for investigational formulation research.
Under this, Dr Reddy’s will provide OctoPlus with fee for service and milestone payments as consideration for services to be rendered by OctoPlus for a maximum of €2 million during the next six months.
These payments are subject to certain development milestones, which if not met will result in the conversion of the payments into a loan. In the case OctoPlus is not able to repay the loan, Dr Reddy’s can opt for conversion of the loan into newly issued ordinary shares at the then prevailing share price level.
The deal is expected to close by the end of the current fiscal. The members of the executive board of OctoPlus would stay on in the employment of the company during the transition period extending to six months following the settlement date.