Aspen to expand into Latin America in R5 billion deal

Aspen Pharmacare announced today that its subsidiary, Aspen Global Incorporated (AGI), will acquire a portfolio of branded products in Latin America for $280 million (R5.01 billion).

AGI is a wholly owned subsidiary of Aspen incorporated in Mauritius.

The company informed shareholders today that it has agreed to acquire commercialisation rights and related intellectual property for a portfolio of well-known branded products in Latin America from Viatris.

Viatris is a major global pharmaceutical company, publicly listed on the NASDAQ, with principal offices in Canonsburg, Pennsylvania.

AGI has determined the fair value of the products as $280 million (R5.01 billion). 

AGI said it would settle the amount through a $150 million (R2.69 billion) cash payment – funded from existing debt facilities – and an extension of supply terms to Viatris.

The products being acquired comprise:

  • Intellectual property required for their commercialisation and any related goodwill owned by Viatris and its subsidiaries;
  • Product registrations and marketing authorisations; and
  • The related inventory

The key products within the portfolio are sold under the brand names Lipitor, Viagra, Lyrica, Zoloft, Norvasc and Celebrex.

Aspen said the transaction is still conditional upon the competition authorities’ approvals in Ecuador and Colombia. 

As part of the acquisition, several employees engaged in commercialising the products will transfer to Aspen’s local subsidiaries.

AGI and Viatris will also conclude supply agreements whereby AGI will be supplied with the products for at least seven years.

The products generated sales of approximately $92 million (R1.65 billion) in the year ended 31 December 2022. 

However, Aspen said that due to how the products have been integrated into Viatris’ business, it is impossible to accurately determine or estimate the profit attributable to the products within the company. 

“It is expected that 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%,” it said.

According to Aspen, this acquisition represents an attractive opportunity for the company to expand its presence in one of its key regions. 

“In doing so, Aspen will acquire a basket of well-established, post-patent brands that will complement its existing portfolio and add to the scale of its business in this region,” it said. 

“Furthermore, the acquisition of a dedicated and experienced sales team will materially enhance Aspen’s commercial capabilities, further strengthening its foundations for future growth in Latin America.”