GSK sheds Australian generics unit for £172m
pharmafile | August 15, 2012 | News story | Sales and Marketing | Aspen Global, GSK, generics
GlaxoSmithKline has divested the majority of its Australian generics unit to Aspen Global, a firm it partly owns.
The South African-based generics firm has bought the unit, which includes 25 non-promoted generic drugs, for £172 million ($270 million).
The divested brands include antibiotics and anti-viral medicines as well as painkillers, muscle relaxants and treatments for nausea and inflammation – sales of which generated £83 million in 2011 and £31 million in the first half of 2012.
Revenues for these products have gradually declined over recent years due to local market price reductions and generic competition, GSK said, meaning its value is dwindling for the firm.
But this kind of revenue will be good for the smaller Aspen firm, which will also hope to help grow the unit. Last year Aspen acquired Australia-based Sigma that allowed the company to introduce its products in Australasia and SE Asia.
“We already issue one in seven scripts in Australia and so this deal means we can promote these brands without many additional overhead costs,” its chief executive Stephen Saad told Bloomberg.
Aspen can take brands that haven’t received attention from the previous owner, and “give them some care and make them work”, he added.
It is expected the divestment will completed in the fourth quarter, subject to regulatory approvals.
The net cash proceeds from the transaction are expected to be around £155 million, with net profit estimated to be around £31 million – GSK currently owns 18.6% of Aspen.
GSK said that, as with the divestment of its OTC brands earlier in 2012, today’s announcement is an example of GSK’s “commitment to realise value and enhance returns to shareholders” through the sale of low growth businesses.
The company said its focus was now firmly on priority brands, products and pipeline opportunities that has long-term growth potential.
Ben Adams
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