Tamar Kahn
1 July 2008
Cape Town — SA's biggest generic drug manufacturer, Aspen Pharmacare Holdings, said yesterday it has bought four of GlaxoSmithKline's older, offpatent drugs for R2,7bn.
The deal would give Aspen (APN) a springboard to launch its products into the more than 200 markets where Glaxo already sold these drugs, said Aspen CEO Stephen Saad. It was consistent with the company's strategy to expand its international footprint, particularly in emerging markets, he said.
The four Glaxo drugs are Eltroxin, a thyroid hormone used to treat hypothyroidism; Lanoxin, a cardiac glycoside used to treat heat failure; Imuran, an immuno-suppressant used for transplant patients; and Zyloric, an enzyme inhibitor for treating gout.
"We are confident Aspen's global distribution network will continue to supply these important products to patients across the world," Saad said.
Under the deal, Aspen will own the four drugs in all major markets outside the US, except for the rights to Zyloric in Japan. The products recorded sales of about £80m last year, said Saad. Although the drugs were no longer protected by patent, they were not threatened by generic rivals as they were niche products that were hard to manufacture, Saad said.
Initially Glaxo will continue to manufacture the drugs, but the long term plan was to move manufacturing to Aspen's facilities, said Saad. "There are a lot of regulatory hurdles to overcome, but the end position is Aspen will manufacture the products in SA," he said.
The deal, financed through Standard Bank, was expected to enhance earnings, Saad said.
The transaction builds on Aspen's recent investments in Latin America and East Africa. Aspen acquired Strides Latina from its Indian parent company last November in a deal valued at more than R1,1bn, giving the company a foothold in Brazil and Mexico.
Aspen also bought 60% of Shelys Africa, an East Africa-based pharmaceutical group with operations in Kenya, Tanzania and Uganda.
Aspen has businesses in Australia and India, and exports to many other countries. The share price closed 0,65% higher yesterday at R31,20.
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