- Baxter International Inc. has completed an approximately $625 million acquisition of Claris Injectables Ltd., handing it more than one hundred pipeline candidates and a suite of production facilities.
- Claris had annual sales of about $112 million last year, and Baxter projects the Indian generics maker will fetch it roughly $55 million in incremental sales by the end of 2017. To that end, Baxter anticipates the deal will be "modestly accretive to adjusted earnings for 2017 and increasingly accretive thereafter," according to a July 27 statement.
- Baxter is now in control of three Claris manufacturing plants, one of which is registered with the Food and Drug Administration. The buyer intends to flesh out those sites with new aseptic manufacturing, lyophilization, as well as cytotoxics, aseptic development and complex formulation technology platforms.
During the second quarter, Baxter's worldwide sales rose a modest 1% to $2.6 billion versus the same period a year prior. As the company prepares to wind down its cyclophosphamide business amid increasing U.S. competition, it has turned its attention to new growth drivers.
"Claris adds a piece to the puzzle, which is the ability to do the filling operations and packaging, also the procurement of APIs and manufacturing of APIs in a very cost-effective way with good quality product," Baxter CEO José Almeida said during the company's second quarter earnings call on July 26.
Bringing on Claris also gives Baxter more than 55 new marketed products that should help resolve its bottom line stagnancy. Baxter anticipates Claris will contribute around $20 million in sales during the third quarter, according to Chief Financial Officer James Saccaro.
"This is a business with a low [selling general and administrative costs], so it's all about gross margin here. And gross margin is providing the market with effective supply chain that creates a cost advantage for us in the market and for the customer," Almeida said on the call.
Claris may be the latest source of new drugs and production capabilities, but Baxter has been active in other areas too as of late.
The company inked a deal with contract research and development organization Dorizoe Lifesciences Ltd. in June to accelerate development of more than 20 generic injectable products. Baxter believes that agreement, along with a strategic partnership with ScinoPharm Taiwan Ltd. focused on manufacturing and commercializing five injectable oncology generics, will help increase the volume of molecules the company is able to produce.
"There's significant amount of investment that we are going to be making in new molecules that we'll be adding to the pharmaceutical business of Baxter, which we plan to be much bigger than just Claris," Baxter CEO José Almeida said during the earnings call.