Aspen Pharmacare expands global pharmaceutical footprint with strategic agreements and acquisitions

SOUTH AFRICA — South African pharmaceutical giant Aspen Pharmacare is making significant moves in the global pharmaceutical market, securing agreements with international companies and acquiring a portfolio of specialist drugs.

These strategic decisions aim to offset previous losses and drive future growth. Accordingly, Aspen Pharmacare has announced agreements with three global pharmaceutical companies to produce their drugs at its French facility.

This strategic move aims to capitalize on the company’s substantial investment in sterile product manufacturing in South Africa and France.

The investment, totaling around R10 billion (approximately US$540.69 million), was initially made in anticipation of high demand for Covid-19 vaccines.

However, the expected demand did not materialize, leaving Aspen with underutilized production capacity and financial challenges.

The agreements, although not disclosing the names of the partnering companies, will focus on packaging drugs.

Aspen expects these agreements to contribute R2 billion (US$ 107.1 million) to its revenue by 2025.

Additionally, the company has an existing deal with India’s Serum Institute, set to contribute another R2 billion (US$ 107.1 million) starting next year. Aspen’s CEO, Stephen Saad, hinted at a forthcoming partnership with a global major.

To further expand its global reach, Aspen Pharmacare has also signed a distribution agreement with the US pharmaceutical giant Eli Lilly, covering a 10-year period for product distribution in Africa worth US$41.5 million.

The agreement includes tirzepatide, an intravenous diabetes drug that has been shown to reduce users’ weight by as much as 15%.

Latin American expansion with specialized drug portfolio

In a separate strategic move, Aspen Pharmacare is deepening its presence in Latin America through the acquisition of a specialist drug portfolio.

This US$280 million (approximately R5 billion) deal includes well-known drugs such as Viagra, Lipitor (cholesterol-lowering medicine), Lyrica (anti-epileptic drug), Zoloft (antidepressant), Norvasc (hypertension medicine), and Celebrex (anti-inflammatory medication).

The acquisition is from Nasdaq-listed drug maker Viatris and is being financed through a cash payment of US$150 million and an extension of supply terms to Viatris.

The acquired drugs generated US$92 million in sales within the year ending December, making them a valuable addition to Aspen’s portfolio.

Aspen Pharmacare believes that the gross margin from these drugs will exceed the 60% gross profit margin of its own pharmaceuticals division during the latter half of 2022.

The acquisition is pending approval from Ecuadorian and Colombian competition authorities, with completion expected by October this year.

Expanding commercial capabilities for future growth

Aspen Pharmacare, valued at R85 billion (US$4.6 billion) on the JSE, views these strategic moves as opportunities to enhance its existing portfolio and expand its presence in key regions.

The company already operates a manufacturing facility in Brazil and has a footprint in Chile, Mexico, Ecuador, Colombia, Canada, and the US.

The acquisition of an experienced sales team is expected to significantly bolster Aspen’s commercial capabilities, providing a solid foundation for future growth in the Latin American market.

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