The Hindu Business Line : Zydus Cadila buys 70% in S. Africa’s Simayla Pharma

Growing business
The group plans to launch a total of 50 products in South Africa.
Simayla would market the group’s products in Namibia, Angola, Botswana, Swaziland and Mozambique.

Mr Pankaj R. Patel, Chairman & MD, Zydus Cadila (file photo).

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Ahmedabad, June 9 Close on the heels of its recent acquisition in Spain, Cadila Healthcare Ltd (Zydus Cadila) on Monday announced acquiring a 70 per cent stake in Simayla Pharmaceuticals of South Africa, through its wholly owned subsidiary Zydus Healthcare SA Pty Ltd, for an undisclosed amount.

As per the agreement reached between the two companies, the remaining stake will be held by the promoter of the company, Mr Ben Classen, who will continue to head the company’s operations. Simayla recorded revenues of South African Rand 18.6 million in 2007 and is expected to touch rand 40.5 million in 2008 (One rand = Rs 5.50approx), the company said.

Mr Pankaj R. Patel, Chairman and Managing Director of the Ahmedabad-based pharmaceutical company , said the acquisition of Simayla, one of the fastest growing generic companies in South Africa, opens up opportunities for the group in a market that is estimated to touch $4.62 billion at consumer prices over the next three years.

Huge potential

With the public sector providing healthcare for up to 80 per cent of the population, there is a huge potential for growth in the generic sector as the Government focuses on improving healthcare access and cutting healthcare costs.

The generic sector is expected to grow at a CAGR of 19 per cent to touch $1.29 billion and is likely to account for 30 per cent of the total drug market by 2011, he added.

The acquisition of Simayla offers opportunity for Zydus to grow its business in Africa’s largest drug market. The company has a strong presence, marketing 58 stock-keeping units with 62 per cent of its products falling in the chronic segment and 38 per cent in the acute segment.

Eighteen of the molecules marketed by Simalya feature in the top 50 new product launches.

The products marketed by Simayla fall in the cardiovascular, anti-infective, respiratory, gastrointestinal and women’s healthcare segments which are also the focus areas for the Zydus Group, thus bringing in a synergistic fit.

To unlock value

Mr Patel said “South Africa has been one of our key focus markets and Simayla’s expertise and promising growth would unlock value for us as we look to consolidate and grow our business in this market rapidly.”

Over the next three years, the group plans to launch a total of 50 products in the market. A strong product pipeline for South Africa is in place with 49 filings, of which 21 have been approved for marketing.

The products will be manufactured at the group’s formulations manufacturing hub at Moraiya, Ahmedabad, which has been approved by the Medicines Control Council, South Africa’s regulatory agency .

Besides South Africa, Simayla would also market the group’s products in Namibia, Angola, Botswana, Swaziland and Mozambique.