Dr Reddy’s Laboratories (DRL) has entered into a definitive agreement to acquire Australia-based Mayne Pharma Group’s US generic for an upfront payment of $90 million (Rs 738 crore) and contingent payments of up to $15 million (Rs 123 crore) product mix.

The acquisition will complement DRL’s US retail prescription drug business with a limited range of competing products. According to IQVIA, for the calendar year ending December 2022, the total addressable market value of the US pipeline products and approved off-market products is approximately $3.6 billion.

Shares of DRL were down nearly 3% in early trading.

DRL SA, a wholly owned subsidiary of Hyderabad-based DRL, will acquire the US generic drug portfolio of Mayne Pharma Group, headquartered in Salisbury, Australia.

The portfolio includes approximately 45 commercial, four pipeline, and 40 approved generic products, including several generics focused on women’s health. For the fiscal period ending June 30, 2022, Mayne Pharma reported total revenue from the acquisition portfolio of $111 million.

Approved high-value products include hormonal vaginal rings, birth control pills and cardiovascular products. “Under the terms of the agreement, DRL will acquire the portfolio for approximately $90 million in cash upfront, up to $15 million in contingent payments, consideration for inventory and a credit line for certain accrued channel liabilities to be determined on the closing date,” the company said in a statement.

During its third-quarter earnings call, the company said it wasn’t planning to make any large acquisitions but was looking at acquiring complementary products or companies.

Closing of the transaction is conditional on the satisfactory completion of customary closing conditions, including the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), as amended.