Dr Reddy's sells off Tennessee antibiotics facility in restructuring push
- Indian generics maker Dr. Reddy's has sold its antibiotic manufacturing facility in Bristol, Tennessee to United Arab Emirates-based manufacturer Neopharma for an undisclosed amount, the company announced this week.
- The deal includes a 390,000-square-foot facility dedicated to oral solid-dose penicillin manufacturing and packaging, as well a separate 24,000-square-foot plastics processing plant.
- No plans were disclosed regarding staffing, but at least some jobs look likely to remain. In a statement, Dr. Reddy's chief operating officer said the agreement would provide continued opportunities for "many" of the employees at the site.
Dr. Reddy's is more often in the news for its manufacturing efforts in its home country of India. But the drugmaker maintains a number of plants in North America as well.
In addition to the now-divested Tennessee facility, Dr. Reddy's operates sites in New York, Louisiana and in Mexico.
The sale of the Bristol plant fits in with Dr. Reddy's broader plan to restructure its manufacturing base and shift to selling more injectable treatments than solid oral dosages.
"This sale is in line with our stated priority to streamline and optimize our global cost structures and help us focus on other business priorities to drive growth," said Erez Israeli, Dr. Reddy’s chief operating officer.
Currently, oral solid dosages make up about 80% of the company's revenue from generic sales in North America, with injectables accounting for the remainder. Dr. Reddy's hopes to boost injectables' share of its business to 50% of revenues in three years' time.
At the same time, Dr. Reddy's is aiming to reshape its manufacturing base. Where North American generics are concerned, 70% of the company's revenues are currently reliant on internal manufacturing sites like Bristol, according to a recent investor presentation.
Over the next three years, Dr. Reddy's hopes to diversify and have roughly half of its revenues coming from partner manufacturing sites.
For its part, Neopharma now has five manufacturing facilities spread across three continents, making branded and generic formulations, as well as active pharmaceutical ingredients. Purchase of Dr. Reddy's plant gives it a foothold in the U.S.
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