Aspen Pharmacare Seeks International Acquisitions

South Africa’s largest generic drugs manufacturer – Aspen Pharmacare Holdings Ltd. – is actively seeking overseas acquisitions in an effort to expand its infant nutrition business.

Aspen Pharmacare supplies generics to over 150 countries, and is pursuing acquisitions in Japan, China and Southeast Asia, according to Gus Attridge, the company’s Deputy Chief Executive Officer. Attridge told Bloomberg that Aspen, “won’t walk away from any great opportunity.”

Attridge went on to comment that the company is attempting to expand its anti-coagulant, infant milk, and women’s health units. In the past three years, Aspen has spent over $2 billion on acquiring products from pharmaceutical companies including Merck & Co., as well as GlaxoSmithKline Plc.

These acquisitions were made in order to boost Aspen’s medicines and manufacturing sites portfolios. GlaxoSmithKline – based in London, England – boosted Aspen’s Japanese operations last year, by taking a stake in the company’s operations there. Though the generics manufacturer was in talks to acquire an infant-nutrition business earlier this year, Attridge says they have been called off without a deal.

The company’s net income increased by 3.9 percent to 5.2 billion South-African rand ($380 million) in the year through June, according to Attridge. Aspen’s sales increased by 22 percent to 36.1 billion rand, with a 46 percent increase in international revenue.

According to Attridge, Aspen’s profit margins were pressured by, “ongoing weakening of the rand relative to the U.S. dollar as well as high wage and energy-cost inflation.” In addition, elevated sales of the low profit margin antiretroviral drugs to the South African government, were also responsible for the suppression of profit margins.

Earlier this year, Aspen Pharmacare Holdings Ltd. entered into a deal to sell a pharmaceutical business to Endo International Plc, based in Dublin, Ireland. The business was sold for approximately $130 million. In addition, the company agreed to sell two pharmaceutical portfolios to units of India-based Strides Arcolab Ltd., for $301 million. Attridge said that the majority of the proceeds from these sales will be used for future acquisitions.

Sources:

• Aspen Seeks Drugs Acquisitions as Overseas Deals Fuel Growth – http://www.bloomberg.com/news/articles/2015-09-09/aspen-profit-beats-expectations-as-international-business-soars