Aspen found fit and healthy to finalise AstraZeneca deal

ASPEN Pharmacare has completed the takeover of Anglo-Swedish multinational pharmaceutical company AstraZeneca.

The transaction will see the Durban-based company acquiring residual rights to AstraZeneca’s global anaesthetic portfolio through an agreement the two companies entered into last year. Aspen, the largest pharmaceutical company listed on the JSE, confirmed that regulatory conditions had been met.

The AstraZeneca deal, estimated at about $555 million (R7.82 billion), includes medicines such as Diprivan, Xylocaine, Marcaine and Naropin. It built on Aspen’s 2016 acquisition of other anaesthetics from the drug maker.

Aspen, which has a market capitalisation of R145.8bn, would reportedly pay as much as $211m on top of the $555m in performance-related instalments until November 2019.

On the other hand, the UK-based AstraZeneca would continue to manufacture and supply drugs to Aspen, which employs more than 10 000 employees for up to five years.

The transaction comes after the Competition Commission (CC) cleared Aspen of anti-competitive allegations in May, following investigations into the market conduct of all pharmaceutical companies operating in South Africa, as well as Brazil, Russia, India, and China.

While Aspen was cleared of unbecoming behaviour by the CC, it was, however, reported in June that the leading drug manufacturer could be fined up to 10 percent of its global turnover, or R3.74bn, if found guilty by EU regulators.

The investigation into Aspen was aimed at determining whether the company made unjustified hikes in the cost of its drugs after manufacturers of older generic products had come under intense scrutiny over high costs of prescription medicines.

Meanwhile, Aspen’s revenue increased 16 percent to R41.2bn for the year ended June. Normalised headline earnings per share rose 16 percent to 1 463 cents during the year. The company’s anaesthetics portfolio generated R7bn in revenue. Earnings before interest, taxes, depreciation and amortisation increased 13 percent to R11.4bn; earnings per share increased 19 percent to 1 123c; while headline earnings per share rose 46 percent to 1 299.5c.

Aspen shares rose 0.43 percent on the JSE yesterday to close at R320.81.