Aspen Pharmacare Holdings will acquire for over R5 billion the commercial rights and related intellectual property for a portfolio of well-known branded products in Latin America, from Viatris Incorporated.
Aspen said its subsidiary, Aspen Global Incorporated (AGI), had concluded the agreement on July 31, 2023. The fair value of the products had been determined by AGI as $280 million (R5.08bn).
AGI would settle the consideration due by means of a combination of a $150m cash payment and an extension of supply terms to Viatris.
Viatris is a major global pharmaceutical company listed on the New York Nasdaq, with principal offices in Canonsburg, Pennsylvania, in the US.
The key products within the Viatris portfolio are sold under the brand names Lipitor, Viagra, Lyrica, Zoloft, Norvasc and Celebrex.
The transaction was conditional upon the approvals of the competition authorities in Ecuador and in Colombia. The deal was expected to be complete on or about October 1, 2023.
A number of employees engaged in the commercialisation of the products would transfer to the local subsidiaries of Aspen. AGI and Viatris would also conclude supply agreements whereby AGI would be supplied with the products for at least seven years.
The products generated sales of about $92m in the year ended December 31, 2022. Due to the way the products were integrated into Viatris’s business, it was not possible to accurately determine the profit attributable to the products within Viatris.
“It is expected the gross margin from the products should be higher than Aspen’s Commercial Pharmaceutical segment gross profit percentage for the six months ended 31 December 2022, of 60%,” the group said.
Aspen said the transaction was an attractive opportunity to expand in one of the group’s key regions. In doing so, Aspen would acquire a basket of well-established, post-patent brands that would complement its existing portfolio and add to the scale of its business in this region.
The acquisition of a dedicated and experienced sales team would also materially enhance Aspen’s commercial capabilities, strengthening its foundations for growth in Latin America.
Aspen’s share price inched up 1.26% to R194.20 yesterday afternoon on the JSE, just shy of its highest 12-month share price of R195.75.
BUSINESS REPORT