Aspen Pharmacare

2012 Generics Revenue: $1.95 billion

Lately, Aspen's leadership seems to have one word on its mind: global. The company supplies branded and generic products in more than 150 countries worldwide and boasts 12 manufacturing sites on 6 continents. These produce generics ranging from antidepressants to antibacterials in tablets, injectables, liquids, semi-solids and several other forms.

Yet its current global footprint apparently isn't enough for South Africa's largest drugmaker. Last year, execs said they'd like to expand into Europe; this June, they made it happen. The company scored back-to-back European deals that should give it more firepower on the continent. Aspen agreed to buy heart meds Arixtra and Fraxiparine from GlaxoSmithKline ($GSK)--which owns about a 20% stake in the South African drugmaker--for about $1.1 billion, with Glaxo throwing in a French plant to produce them. And a week later, Aspen announced it would pay Merck ($MRK) $1 billion for an API facility and parts of two others in the Netherlands, along with another API plant in the U.S. and 11 products ranging from hormone replacement treatments to the anticoagulant Orgaran.

In turn, Aspen says, the deals should feed sales into Latin America and the Asian Pacific, other areas it has its eye on. And after it gets those operations under control, Aspen will be able to set up its own business units in Russia, as well as other former Soviet republics, and elsewhere in Europe. And while the buyouts will put it near its own debt limit, Aspen expects them to meaningfully impact its top line.

Those acquisitions build on a global presence Aspen has expanded over time. Most notably, the company in 2010 bought out the generics business of Australia's Sigma Pharmaceuticals. That acquisition, worth $800 million, gave Aspen about a quarter of Australia's generics market and made it the country's largest manufacturer of prescription drugs. Then, in 2012 came a $268 million deal to buy the rights to 25 GSK products no longer promoted in Australia--like herpes med Valtrex and antibiotic Amoxil. Shortly after that, the company teamed up with India's generics specialist Cipla, tapping its product supply to feed Australian expansion. And while Australia is not a fast-growing pharma market, it doesn't see much competition, and its government has been pushing more generics use, putting Aspen in a position to succeed.

So what has all this Australian investment amounted to? In the fiscal year ended this June, Aspen's Asia Pacific business contributed 37% to group revenue--more than any other region. The R7.6 billion it generated built on prior-year sales by 26%. But Latin America took the title for the region with the biggest revenue jump, with sales increasing 48% to R3.7 billion.

That's not to say Aspen has ignored its home market by any means. In the most recent fiscal year, South African revenue increased by 20% to hit R7.4 billion.

Luckily for Aspen, the South African government limited outside competition last April. Looking to reverse a domestic production decrease that had produced job cuts, it compiled a list of 70-plus drugs that would have to be procured from in-country manufacturers.

For more:
South Africa's Aspen reports head-turning results
Aspen feeds its global appetite with 2nd deal in a week
Aspen to buy Merck API plant in Netherlands to feed expansion
Cipla, Aspen eye joint excursion in Australia
Aspen Pharmacare eyes another $800M in M&A
S. Africa ratchets up protection for domestic drugmakers

Aspen Pharmacare
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