South Africa's Aspen Pharmacare has set its sights on rapid expansion in China as it builds on low-cost generic manufacturing and a year in which it went through a series of sales and acquisitions across the globe.
For the largest maker of generic drugs in Africa, Durban-based Aspen's move into China also represents an interesting manufacturing scenario where low costs and speed to market are widely assumed to belong to domestic players and joint ventures with multinationals.
Indeed, Indian drug firms known for the same model have struggled to get toeholds into China with industry groups often complaining they are too dependent on the Middle Kingdom for active low-cost pharmaceutical ingredients.
But Aspen CEO Stephen Saad told the Business Daily of South Africa that it would ramp up sales representatives in China by an additional 350 "in the next few months" with a target of 500 as quickly as possible.
"Aspen believes absolutely that it can expand quickly into a market such as China, because the critical thing when it comes to medicine beside the price point is quality of the product," Saad told the Business Daily.
"That is why we put so much effort into our manufacturing capabilities and manufacturing quality. We have the quality of drug that you can get in any multinational and it’s affordable."
South Africa recently scored a coup on the drug manufacturing front, getting Mumbai-based Cipla to build a biosimilar manufacturing plant in the country for SAR1.3 billion ($89 million)--marking the first such type of a biotech unit outside India for the firm, and in a country where it has extensive operations and goodwill.
The plant will make biosimilars at lower costs for South Africa, where Cipla Medpro is the country's third-largest pharmaceutical manufacturer and also owns Cipla BioTec aimed at biopharmaceuticals.
A deal last year with India’s Strides Arcolab saw Aspen garner about $300 million to hand over about 130 branded and generic drugs to Strides' Australian business and 6 branded products to Strides' Singapore unit.
Separately, in 2015, GlaxoSmithKline ($GSK) halved its stake in Aspen, creating room for new investors--while leaving the U.K.-based firm with $890 million. Aspen last month topped a string of acquisitions and bought the anesthetics portfolio of AstraZeneca ($AZN) for $770 million.
Saad, however, signaled to Business Daily that dealmaking was on hold for now.
"In our next financial year we want to bed down the acquisitions that we have made," Saad told the newspaper. "And we want to identify other products that can build off this range."
- here's the story from Business Day
Cipla marks first biotech plant abroad with plans for South Africa facility
AstraZeneca gins up $520M-plus selling anesthetics rights to Aspen
Strides spans Singapore, Australia, India and Africa in Aspen generics deal
Glaxo to reap $890M as it halves stake in South Africa's Aspen