Novartis buys Aspen’s Japanese generic unit for up to $440 million

Reuters Zurich | Updated on November 11, 2019 Published on November 11, 2019

Swiss drugmaker Novartis CEO Vas Narasimhan   -  REUTERS

Novartis is buying the Japanese generics unit of South Africa’s Aspen Pharmacare in a deal worth up to €400 million ($440.80 million) to expand in the world’s third-biggest drug market, the Swiss drugmaker said on Monday.

Novartis’ Sandoz generics business agreed to pay €300 million initially, plus a deferred amount not expected to exceed €100 million based on certain conditions being met, Novartis said. Completion of the transaction is expected in the first half of 2020.

Aspen Pharmacare has abandoned its dividend this year and is selling assets to pay down debt after levels moved close to breaching debt covenants.

Novartis’ Sandoz is adding Aspen’s Japan business in part to boost access to hospitals there. The South African’s portfolio consists of 20 off-patent medicines with annual sales of €130 million, including anaesthetics like Xylocaine as well as speciality brands such as the immune suppressing drug Imuran used by some multiple sclerosis patients.

“The acquisition of Aspen’s Japanese operations would significantly strengthen our position in this country, a stable but growing generics market,” Sandoz Chief Executive Richard Saynor said in a statement.

Sandoz is in the midst of a reorganisation within Novartis, as Chief Executive Vas Narasimhan sells US generic pills and dermatology assets that had come under price pressure while simultaneously boosting the autonomy of the remaining businesses in a move he said will help them better compete.

Published on November 11, 2019
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