The Lannett facility offers Aurobindo significant room for capacity expansion and positions it to benefit from US government reshoring initiatives
The acquisition of Lannett Company in the US by Aurobindo Pharma will provide the drug-maker a strong manufacturing base in the US at a time when tariffs on imports into the US have become a concern for the pharmaceutical industry.
The Hyderabad-based Aurobindo Pharma announced on Wednesday a definitive agreement for Aurobindo Pharma USA Inc., its wholly owned subsidiary, to acquire Lannett Company LLC from Lannett Seller Holdco, Inc., at an enterprise value of $250 million (₹2,185 crore) on a cash-free, debt-free basis.
Based in Trevose, USA, Lannett has been a US-based manufacturer and supplier of superior-quality, complex generic pharmaceuticals, including DEA-controlled substances, with a capacity to produce 4 billion annual doses at 40 per cent utilisation and a strong FDA and DEA compliance track record.
Lannett’s US manufacturing and distribution facility can enable the company to capitalise on controlled substance tailwinds and curate a nimble portfolio of complex generic drugs.
Acquisition helps offset tariffs
It has a purpose-built facility with room for significant scale-up and meaningful incremental capacity for Aurobindo, and the infrastructure supports rapid capacity expansion to meet future demand. It also brings a competitive advantage as the U.S.-based site aligns with reshoring initiatives and government procurement preferences.
With over 430 employees, it has registrations for manufacturing the drugs in the schedules of the Drug Enforcement Administration (DEA) in the United States, which classifies controlled substances.
Local manufacturing offers cost synergies, Government biz access
“The new manufacturing base in the US will also allow Aurobindo to offset any adverse impact of tariffs on imports from India through local production besides providing access to European export market,” R Uday Bhaskar, former director-general of Pharmaceuticals Export Promotion Council (Pharmexcil), told businessline.
Apart from helping Aurobindo in cost synergies through operational leverage due to SG&A rationalisation, it also offers a diversified range of valuable complex-controlled substance products (non-opioid) with technical and regulatory complexity.
Government Business Opportunities offer a strategic advantage through a local manufacturing footprint, while a new product pipeline drives down unit costs by scaling up production volumes at underutilised US facilities.
Aurobindo Pharma’s scrip lost 1.39 per cent on the Bombay Stock Exchange on Thursday to end at ₹1,140.95.
Published on July 31, 2025