Mitsui & Co. (Tokyo) says it has entered into an agreement with Arch Pharmalabs (Mumbai), a pharmaceutical chemical intermediate and active pharmaceutical ingredients (API) manufacturer, to acquire about 5% of Arch for ¥1.2 billion ($14 million). The agreement makes Mitsui one of the first Japanese conglomerates to acquire a stake in an Indian pharmaceutical contract manufacturing organization (CMO), Mitsui says. Through this investment, Mitsui aims to strengthen the CMO business platform. India has a huge potential for manufacturing pharmaceutical chemical intermediates and APIs and the market demand is growing in the Asia/Pacific region, Mitsui says.

"The pharmaceutical industry as a whole is facing a 'patent cliff'  problem in 2010, where many of the so called 'blockbuster drugs' lose patent protection and are expected to encounter strong competition from generic products. Under the circumstances, many multinational companies are already moving into India and recognizing India as a global factory for the pharmaceutical industry with competitive technology and pricing. Mitsui, through this investment into Arch, hopes to take a further role to make a contribution to the industry by supplying key raw materials both in the Asia/Pacific region and the world," Mitsui says.

Arch owns manufacturing plants across India, and currently supplies its products to various leading pharmaceutical companies based in the U.S., Europe and the Mideast for drugs related to hypertension, hyperlipidemia, antibiotics and cancer amongst others.

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