Aspen Phar­ma­care eupho­ria over ac­qui­si­tions’ big prof­its

The Mercury - - COMPANIES - Sandile Mchunu

ASPEN Phar­ma­care’s share price leaped 8.51 per­cent yes­ter­day on the back of a strong set of an­nual re­sults and on its re­cent ac­qui­si­tions.

The phar­ma­ceu­ti­cal com­pany’s share price closed the day at R309.84 on the JSE.

Part of Aspen’s good run dur­ing the year to end June can be at­trib­uted to two ac­qui­si­tions, As­traZeneca’s global anaes­thetic port­fo­lio, ex­clud­ing the US port­fo­lio that was ef­fec­tive from Septem­ber 1 last year, and the ac­qui­si­tion of Glax­oSmithK­line’s anaes­thet­ics port­fo­lio, ef­fec­tive from March 1. The anaes­thet­ics port­fo­lio gen­er­ated rev­enue of R7 bil­lion.

Aspen ac­quired the com­mer­cial­i­sa­tion rights of As­traZeneca’s port­fo­lio for an up­front con­sid­er­a­tion of $520 mil­lion (R6.8bn) and $370m for Glax­oSmithK­line’s anaes­thet­ics drugs.

Now the group has an­nounced that it would pay $766m, an ini­tial $555m for the re­main­ing rights to the in­tel­lec­tual prop­erty and man­u­fac­tur­ing knowl­edge re­lated to the anaes­thetic medicines, plus a fur­ther $211m based on the per­for­mance for As­traZeneca’s re­main­ing rights.

Aspen deputy chief ex­ec­u­tive Gus At­tridge said the group was ex­cited about these lat­est de­vel­op­ments, even though it ini­tially did not plan to ac­quire the re­main­ing rights.

“We saw an op­por­tu­nity and we acted on it. The ini­tial ac­qui­si­tion proved to be an ex­cel­lent strate­gic in­vest­ment for Aspen, par­tic­u­larly when al­lied to the sub­se­quent ac­qui­si­tion of the GSK anaes­thet­ics,” At­tridge said.

Aspen in­creased rev­enue by 16 per­cent to R41.2bn and in­creased nor­malised head­line earn­ings per share by 16 per­cent to 1 463 cents a share. The board de­clared a div­i­dend of 287c per or­di­nary share dur­ing the pe­riod.

By­ron Lot­ter, a port­fo­lio man­ager at Ves­tact, said the re­sults were good. “The first half was very tough and the num­bers showed it. But the sec­ond half was fan­tas­tic and pulled the full year num­bers to very im­pres­sive growth lev­els.

“Of course there were lots of mov­ing parts here. The rand strength­en­ing was a big lag on earn­ings, but is pos­i­tive for their debt lev­els which are mostly in euros,” Lot­ter said.

How­ever, he added that op­er­a­tionally many things were fi­nally bear­ing fruit. “They de­cided to go full tilt in­ter­na­tional in 2013 and Stephen Saad said that these num­bers are fi­nally paint­ing a pic­ture of what they were try­ing to achieve,” he added.

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