Valeant gets manufacturing in Middle East with deal for Amoun

Inside the Amoun factory--Courtesy of Amoun

While some European drugmakers have been in Middle East and African markets for decades, many others are only now beginning to see them as smart moves for growth. And many that are trying to tap those markets see having local manufacturing as a big plus. Valeant ($VRX) has now bought into that in theory and practice with its $800 million deal for Amoun Pharmaceutical.

Valeant Friday announced its deal for Egypt's leading company, which also includes contingent payments. With the buyout, it picks up what the Egyptian drugmaker says is one of the largest and most up-to-date pharmaceutical facilities in Africa and the Middle East. The main plant, just outside of Cairo, has the capabilities to cover the waterfront in dosage forms, tablets and capsules, liquids, creams and suspensions, as well as sterile drugs. It produces both human and veterinary products. A second facility makes antibiotics.

Valeant intends to use the Amoun buy as its base for expansion in Africa and the Middle East. Valeant joins Big Pharma players like Pfizer ($PFE), AbbVie ($ABBV), Sanofi ($SNY) and Merck ($MRK), which are adding manufacturing in the Middle East and North Africa region. It also will find itself competing in the region with other drugmakers based in the Middle East, as well as Indian companies like Cipla, as well as some growing African players.

Pfizer ($PFE) is slated to begin production this year at a 32,000-square-meter facility in Rabigh on the western coast of Saudi Arabia. Neopharma, which is based in the United Arab Emirates (UAE), last fall said it would invest ($266.5 million) to build both a drug manufacturing facility and a hospital in Jarzan City in Saudi Arabia. Neopharma also provides production for some Western drugmakers in the region like Merck KGaA. Another UAE-based company, Gulf Pharmaceuticals, this year said it would invest $10 million on a sterile injectables plant in Ethiopia. And the list goes on.

- read Valeant's release