pharmaceutical giant Aspen announced that i t had entered i nto a series of agreements with TesoRx Pharma (TesoRx), a specialty pharmaceutical company, market-watchers didn’t treat it as major news.
Yet the move, which will see Aspen Pharmacare acquire licensing rights to TesoRx’s unmodified oral testosterone replacement therapy, i s a clear indication that the manufacturer sees ample opportunity in testosterone replacement treatments.
According to reports, global sales of currently available testosterone replacement products top $2.5bn, so i t i s undoubtedly shaping up to be big business, and Aspen i s well positioned to be the trend’s emerging markets champion.
Although it remains controversial, testosterone replacement therapies are becoming increasingly popular with men as an anti-ageing tonic and a way to boost muscle mass and sexual performance.
Dubbed the Low T movement, i t has become something of a marketing phenomenon in the US, with roughly 2.3m US patients receiving a prescription for testosterone last year – up 77% from 2010, according to figures from the US Food and Drug Administration (FDA). IMS Health has indicated that sales of testosterone drugs grew by 90% over five years, reaching $ 1 . 9bn i n 2011. By 2017, the entire testosterone market is forecasted to hit $5bn.
While the Aspen deal is small – the group will acquire a minor stake in TesoRx and will invest a total of $15m in the specialty company – it is surely a sign of things to come. (It is worth noting that the oral therapy in the spotlight, TSX- 002, has only been tested on 150 individuals and trials are set to begin in 2015.)
Aspen will pay royalties to TesoRx for sales on a country-by-country basis and will be “responsible for developing and commercialising TSX-002 in the emerging markets of Latin America, Africa, Asia Pacific, Russia and other countries in the Commonwealth of Independent States”.
“The transaction adds considerable secondary synergies with the group’s manufacturing capabilities as a key global supplier of Testosterone APIs,” stated Aspen in a press release, adding that the deal bolsters its presence “in a key therapeutic area for the group”.
As Bruce Main, of I vy Asset Management points out, the Aspen board i s “renowned for shrewd moves in innovating and improving its product pipelines”.
“The deal allows the group access to a growing market which is also expanding i n emerging markets where Aspen has great distribution,” explains Main. “I think Aspen’s ability to bring these new products through to its distribution channels is very encouraging.”
“I f approved, t hi s could be huge,” commented Vestact’s Sasha Naryshkine in a note to clients. “An easily administered therapy would go a long way to more people using the therapies.”
He adds: “This does, however, [to me at least] represent a different angle of business, getting involved in smaller businesses earlier on, which only size and scale can often afford you that luxury. We continue to accumulate what is a fabulous business operating in an exciting sector.”