Aspen to Buy Anesthetics From AstraZeneca for $520 Million
Aspen Pharmacare Holdings Ltd. agreed to buy anesthetics medicines from AstraZeneca Plc for at least $520 million, the first acquisition by Africa’s largest generic-drugs maker since securing new funding.
The South African company will also pay AstraZeneca royalties and as much as $250 million in additional sales-based installments over the next two years, Durban-based Aspen said in a statement on Thursday. Aspen will gain seven established drugs sold in more than 100 countries that generate revenue of $592 million a year.For AstraZeneca, the agreement builds on a string of deals where it has licensed out products that aren’t core to its business to boost revenue and enable investment in focus areas like cancer. Revenue from such “externalization,” as the company calls it, was $1.1 billion last year, and the company expects to generate more than that this year.The biggest stories of the day, every day.AstraZeneca’s anesthetics are “very different” from the rest of the company’s products because they are marketed to hospitals rather than to doctors, said Luke Miels, executive vice president of global product and portfolio strategy. AstraZeneca’s market share in anesthetics has fallen to 14 percent from 22 percent since 2011, he said. The market as a whole is “heavily genericized, with minimal differentiation,” and not one that AstraZeneca would like to compete in, he said.Through the deal, AstraZeneca will benefit from Aspen’s relationships with hospitals. AstraZeneca’s 360 employees working on anesthetics sales globally will be offered the option of going to Aspen.Aspen shares gained 9.5 percent to 351.41 rand by 4:07 p.m. in Johannesburg, on track for their biggest gain in almost four months. AstraZeneca shares fell 1.4 percent to 3,974.5 pence in London.Anesthetics are “a therapeutic category that presents the opportunity to add significant value,” Aspen said. “The key territories in which the portfolio is sold represent an excellent fit with Aspen’s existing operational geographic footprint.”The deal comes a day after Aspen said it had secured 3 billion euros ($3.4 billion) in funding, attracting support from 27 banks. The company has spent more than $2 billion on acquisitions from drugmakers including GlaxoSmithKline Plc and Merck & Co. in recent years to boost its array of medicines and manufacturing sites, and now sells products in more than 150 countries.June 9, 2016
Source: http://www.bloomberg.com/
