Pharmaceuticals and biotechnology major Aspen has finalised the acquisition of Sandoz China, gaining a bigger foothold into the world’s second-largest pharmaceutical market as it steams ahead with its diversification strategy.
In a statement on Thursday, Africa’s biggest pharmaceutical manufacturer said that it had received all the necessary regulatory approvals to conclude its acquisition of Swiss drug maker Sandoz’s Chinese subsidiary for up to €92.6m (R1.9bn).
In a secondary transaction, Aspen has also been given the go-ahead to sell Sandoz the European commercial rights to a portfolio of four anaesthetic drugs in a linked deal worth up to €55.5m (R1.1bn).
“Aspen is pleased to confirm that the required merger authority approval for the transactions has been granted by the Chinese authority, [the] state Administration for Market Regulation,” Aspen said.
“Both of the transactions are anticipated to become effective by the end of the current financial year.”
The move comes as part of the pharmaceutical giant’s bid to make acquisitions in China as part of its strategy to diversify its business and offset the risk created by the government’s move to volume-based procurement in 2019.
China is the third-biggest contributor by country to Aspen’s sales and management hopes it will ultimately become the top contributor, with the acquisition expected to add R1.8bn in annual sales to the group.
Under the terms of the agreement first announced in December, Aspen is set to acquire the entire share capital of its subsidiary, Sandoz China, along with the commercialisation rights and related intellectual property for a portfolio of well-established brands including the acromegaly treatment Sandostatin, bone treatment Aclasta and the anti-fungal medicine Voriconazole.
Aspen will pay Sandoz up to €92.6m, with €18.5m contingent on the sale of other pipeline products to be launched soon.
The second deal will see Aspen sell the European commercialisation rights and related intellectual property for four of its anaesthetic products — Nimbex, Tracrium, Carbocaine and Naropin — for up to €55.5m, with €9.3m contingent on the sales performance of these products.
Aspen acquired Nimbex and Tracrium from GlaxoSmithKline in 2016, and Carbocaine and Naropin from AstraZeneca the same year. These products contributed about R280m to group sales in the year to June 30, said Aspen.
The group has said that the disposal would allow Aspen’s European management to adopt a more focused approach to its remaining anaesthetic products in the region.
The JSE-listed group with a market capitalisation of R98.2bn has been on an acquisitive spree, having bought the distribution rights for some well-known Viatris drugs including Viagra, Lipitor and Celebrex in Latin America in 2023 in a deal worth $280m (about R5bn).
In another deal also inked in 2023, Durban-based Aspen, one of the leading global players in generic antiretrovirals, struck a deal with biopharmaceutical company Amgen to distribute its oncology and immunology products in Sub-Saharan Africa.
Aspen shares were up 0.8% to R220.02 on Thursday, having climbed about 30% in the past six months.
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