Aspen expands in China as it targets global growth

Aspen Pharmacare plans to increase its Chinese presence as Africa's biggest maker of generic drugs ramps up distribution of its low-cost pharmaceuticals in the world's most populous country.

The company will add 350 sales representatives in China "in the next few months" and plans to later increase that to 500, according to chief executive officer Stephen Saad.

He said Aspen wants to tap demand in the country for high-quality drugs at low prices. Saad said Aspen believes absolutely that it can expand quickly into a market such as China, because the critical thing when it comes to medicine besides the price point is quality of the product. Aspen is seeking growth from the US and Europe as well as China and other Asian territories. About 20 percent of revenue came from the Asia Pacific region in the six months through December, while South Africa remains the biggest contributor of sales.

Aspen bought anaesthetics medicines from AstraZeneca for $520m plus add-ons last month, the latest in a string of deals, and is looking for other new products to complement the existing portfolio, Saad said. Regarding antiretrovirals, the Aspen CEO said regional planning on distribution and manufacturing of the medicines used to treat those with HIV would be an "unbelievably good idea" as it would reduce bureaucracy and improve access to a wider range of drugs. Almost 37-million people were living with the virus in 2015, according to UNAIDS.
 
Saad said the problem currently is that each of the smaller southern African countries now want their own packaging, their own registration fees, and the volumes are too small in places like Botswana and Namibia to justify that. Aspen shares have gained 21 percent this year, valuing the drug maker at R171-billion. The company is South Africa's seventh-largest by that measure. The stock has increased more than 335 percent in the past five years. The company has spent more than $2-billion on acquisitions from drug makers including GlaxoSmithKline and Merck & Company in recent years to boost its array of medicines and manufacturing sites. London-based Glaxo sold down a 19 percent stake in the company in 2013 but remains a minor shareholder and has a stake in Aspen's Japanese unit.

Bloomberg, 21 July 2016