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Sandoz expands into Japan with €400m Aspen deal

Will gain presence in third largest generics market in the world

Sandoz logo building

Sandoz, the generics division of Swiss pharma Novartis, has agreed to acquire South Africa-based Aspen’s Japanese operations and associated assets to bolster its global presence. 

Sandoz will pay Aspen an initial cash consideration of €300m and a certain deferred consideration of up to €100m, depending on certain conditions being fulfilled after the deal is closed.

The agreement will see Sandoz acquire the entirety of Aspen Global Incorporated’s (AGI) Japanese business division, which is a wholly owned subsidiary of Aspen Pharmacare Holdings Limited.

The acquisition will include shares in Aspen Japan K.K. and all associated assets held by AGI.

“The acquisition of Aspen’s Japanese operations would significantly strengthen our position in this country, a stable but growing generics market,” said Sandoz CEO Richard Saynor.

"We are committed to helping address patient and customer needs in the market as we aspire to become the world’s leading and most valued generics company,” he added.

Japan’s generic medicines market is the third largest globally, a fact which will aid Sandoz’ continuing growth – in Novartis’ recent third quarter results, Sandoz brought in a hefty $2.5bn, despite being partially offset by price erosion.

Aspen’s portfolio consists of approximately 20 off-patent medicines, including anaesthetics like Xylocaine and speciality brands such as immune suppressing drug Imuran for multiple sclerosis patients.

The full-year sales for the fiscal year ending in 2019 for these products amounted to €130m.

In addition to handing over this select portfolio, AGI has also entered into a five year manufacturing and supply agreement with Sandoz for the supply of active pharmaceutical ingredients, as well as semi-finished and finished goods related to the portfolio of the divested brands.

The manufacturing deal also has an option of an additional two year extension, and will take effect on completion of the transaction.

This completion is conditional upon certain conditions, with the deal expected to close in the first half of 2020. The proceeds Aspen gains from the transaction will be used to reduce its debts.

“This transaction complements our stated strategic intent to focus on our core pharmaceutical business in markets that offer scale and alignment to our business model,” said Stephen Saad, chief executive at Aspen Group.

“Although our Japanese-based operations do not provide appropriate scale and leverage in relation to this focus, the strong management team, dedicated staff, specialty portfolio and the commercial platform represent an excellent opportunity for Sandoz when combined with their Japanese portfolio and product pipeline,” he added.

Article by
Lucy Parsons

11th November 2019

From: Sales



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