Dive Brief:
- Mylan has requested Strides Shasun (formerly Strides Acrolabs) help pay for correcting regulatory problems at three Bangalore-based manufacturing facilities. The plants were originally acquired as part of Mylan's $1.75 billion acquisition of Strides Arcolabs, a sterile injectables business, in December 2014.
- The FDA had previously sent Mylan a warning letter regarding these regulatory concerns.
- Strides believes it can defend against those claims. The company had put $200 million into escrow to cover claims costs when the original deal was struck.
Dive Insight:
Mylan asserts Strides should help cover the expenses associated with problems which existed prior to the deal. However, the FDA's letter noted Mylan's corporate quality system should have picked up the problems earlier and addressed them immediately.
For its part, Strides believes it can defend against Mylan's claims and expressed its confidence that any claims would fall within its escrowed amounts.
While it's not clear how much it will cost to comprehensively address these manufacturing facility problems, Mylan's CEO, Heather Bresch, has committed to working closely with the FDA to resolve it.