Mumbai, June 10: Chennai-based Orchid Chemicals & Pharmaceuticals is acquiring US-based generic drug marketing company Karalex Pharma in an all-cash deal for an undisclosed sum.

The acquisition will help Orchid to directly sell its generic products in the US, the world’s largest pharmaceutical market. So far, the company followed a partnership model through which it entered into alliances with US companies.

With Karalex Pharma under its belt, Orchid expects $20 million to be added to its topline in the current fiscal year. Revenues are expected to jump to $100 million in three years. The transaction, to be funded by internal accruals, is expected to close this month, subject to conditions.

Launched in 2007, Karalex Pharma supplies generic drugs to pharmacy chains, hospital groups and other institutions across the US.

“With this acquisition, Orchid has established its presence in the generic sales and marketing area. The acquisition will provide a strong US-based sales capability to Orchid, paving the way for synergistic returns from our upcoming and long-term generic pharmaceuticals pipeline,” Orchid managing director K. Raghavendra Rao said.

Building defence

Orchid promoters are taking steps to ensure that the company does not become a takeover target. While the promoters now hold around 26 per cent, Rao said they would use Sebi’s acquisition norms to ramp up their stake by 5 per cent through the purchase of shares from the open market.