HYDERABAD, Nov 24: Aurobindo Pharma expects to
become a debt free company in the three next years barring the
amount it is spending on acquisition of Sandoz products, a
senior official of the city-based company has said.
In September last year, the USD three billion drug
maker said its US subsidiary entered into an agreement to
acquire commercial operations and three manufacturing
facilities in America from Sandoz Inc, USA, a Novartis
Division, for USD 900 million.
“During the year, we will reduce between USD 150
million to USD 200 million debt, and we have already achieved
that..On the long-term front, based on the experience, which
we had in the last two or three quarters, and we are targeting
to achieve a zero debt in the next three years. That’s what we
are all seeing on the existing business… without considering
Sandoz,” Santhanam Subramanian, Aurobindo Chief Financial
officer said in a recent earnings call.
The company’s net debt decreased by USD 71 million
quarter-on-quarter to USD 522 million at the end of September
2019 against USD 593 million at the end of June 2019.
The majority of the company’s debt is denominated in
foreign currency.
The cash and bank balance was at USD 305 million.
Replying to query, Narayanan Govindarajan, Aurobindo
Pharma’s managing director, said they expect Federal Trade
Commission’s nod for the acquisition of the Sandoz products
and three facilities by next month or January.
The acquisition will add approximately 300 products
including projects in development as well as commercial and
manufacturing capabilities in the US, complementing and
expanding the group’s portfolio and pipeline and the
portfolio is expected to generate over USD 900 million in
sales for the first 12 months after completion of the
transaction for Aurobindo, the drug firm had earlier said.
Govindarajan said the company is expecting re-
inspection of its three manufacturing facilities, of which one
received warning letter and two others received “official
action indicated (OAI)” from the US Food and Drug
Administration.
“The inspection should happen before March or by
March-April time line is what our best estimate is. And we are
preparing ourselves to ensure that the inspection goes well,”
the official said. (PTI)
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