Company acquisitions continue apace

A number of company acquisitions were made in June, which will have a bearing on the global generic markets, with acquisitions taking place in the Americas and Europe. In addition, a new strategic agreement was signed in South Africa.

In Argentina, GlaxoSmithKline announced that it had acquired Laboratorios Phoenix. GlaxoSmithKline commented that it was making the acquisition to help accelerate sales growth and further extend its product portfolio in Argentina and Latin America. Laboratorios Phoenix was founded in Buenos Aires in 1939, and manufactures branded generic products covering therapeutic areas such as cardiovascular, gastroenterology, metabolism and urology. GlaxoSmithKline's acquisition follows a recent trend of branded firms taking a closer interest in generic firms.

Along similar lines, although not an acquisition, was the announcement made by Adcock Ingram and Merck & Co, through its MSD trading name, of a strategic collaboration in South Africa. The collaboration is to co-promote and distribute a number of MSD products in South Africa, including both prescription medicines and over-the-counter products. Merck reasoned that it sees the emerging markets as becoming an important contributor for future performance and growth, and expects such markets to account for over 25% of its global pharmaceutical and vaccine revenues in 2013. Merck has thus become one of a number of large branded companies in recent times to see a future in the emerging and developing markets, leading to strategic tie-ins with local firms. There has been most notably a surge of multinational firms making deals with particularly Indian generic companies.

However, the Indian firms themselves have also shown this to be a two-way street. India's Orchid Chemicals & Pharmaceuticals announced in June that it was to acquire a US-based generic manufacturing and sales services company, Karalex Pharma. Orchid declined to name its price; the acquisition was completed on 2nd July. Orchid aims for the acquisition to help it create itself as a US-based generic pharmaceutical company, and the move gives the firm a presence in the front-end US market. Separately, in March 2010, Orchid sold its generic injectable business to Hospira, completing a US$400 million deal which was announced in December 2009. Coincidentally, alongside Orchid's Karalex acquisition, Hospira announced its first generic drug launch from its Orchid acquisition, with the launch of its meropenem for injection, a generic equivalent of AstraZeneca's Merrem IV.

Elsewhere, in Europe, Lithuania's Sanitas announced that it had sold the manufacturing site of its Slovakian subsidiary, HBM Pharma, to a Latvian firm, Liplats 2000. HBM Pharma had, prior to Sanitas' own acquisition of it, been known as Hoechst Biotika, and Sanitas had acquired it in 2005 from sanofi-aventis. However, Sanitas is keeping hold of HBM Pharma's marketing, sales and regulatory divisions, located in Bratislava and Prague. After Sanitas acquired HBM Pharma from sanofi-aventis, the firm worked to integrate the business into the Sanitas group as a manufacturing unit and as a hub to commence sales and marketing in neighbouring countries. This part of the business is clearly still of interest to Sanitas.

Ian Platts – Editor, World Generic Markets