This is believed to be the first time that an Indian active pharmaceutical ingredient (API) manufacturer has bought a US-based API supplier, and provides additional evidence, if any were needed, of the growing stature of the Indian drug sector on the global stage.
Malladi, already a player in the global market for pseudoephedrine and the related compound ephedrine, snapped up Novus Fine Chemicals for around €19 million, helped by funding provided by a consortium of private equity investors. Malladi's annual revenues are around €15m, but it wants to more than double that to around €38m by the end of 2006.
The acquisition of Novus, and its bulk drug facility, gives Malladi a total production capacity equal to approximately one-third of the total global pseudoephedrine market. Novus' current market share in US is about 15 per cent in this category while Malladi's claims its global market share is also 15 per cent.
For Malladi, the ownership of a US plant makes it much easier to sell its material into the large US pharmaceutical market, as pseudoephedrine is a controlled substance with restrictions on imports.