Company News

South Africa's Aspen to seek acquisitions in emerging markets

JOHANNESBURG, Sept 10 (Reuters) - South African pharmaceutical major Aspen Pharmacare Holdings Ltd said on Thursday it is planning to expand its portfolio in emerging markets through a mix of organic growth and acquisitions, as part of a new strategy.

“The focus of the business is to take it to a significant level in countries where we are well established with a strong base,” Aspen’s Deputy Chief Executive Gus Attridge told Reuters.

He said the company preferred exiting from developed markets where it lacked scale.

Earlier this week Aspen agreed to sell the rights to its European thrombosis business to U.S. pharmaceutical company Mylan, while retaining the business in emerging markets.

Aspen Chief Executive Stephen Saad said during an investor presentation that with the sale of the thrombosis business, the country’s biggest drugmaker had mostly achieved its targets of reducing its portfolio and cutting its debt.

“We have invested billions in our business and those returns will start coming now,” he said, adding that the company will continue with its strategy of not raising equity to meet capital needs.

Aspen, which has a 22% share of the sub-Saharan Africa drug supply market, has two main business divisions - commercial pharmaceuticals and manufacturing.

Commercial pharmaceuticals, under which the company sells injectables and oral medicines, contributes almost 85% of group revenues.

Attridge said Aspen would look at acquisitions in its commercial business in countries such as Australia, China, South Africa and territories in Latin America.

Aspen’s full-year headline earnings per share rose 9% to 12.68 rand ($0.7617), boosted mainly by its manufacturing division, which saw a 30% increase in profits.

Headline earnings per share or HEPS is the main profit measure for South African companies.

The company warned however that the coronavirus pandemic is likely to impact results in the year ahead, though they could benefit from a depreciated rand.

$1 = 16.6473 rand Reporting by Promit Mukherjee; Editing by Jan Harvey