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Ascendis buys stake in Spanish drug firm

Cape Town – Ascendis Health [JSE:ASC] on Monday announced its first international acquisition with the purchase of a 49% stake in Spanish pharmaceutical group Farmalider for R210m.

Ascendis has the option to purchase the remaining 51% of Farmalider at predetermined multiples from the founding shareholders in two tranches in 2018 (31%) and 2020 (20%), said the Cape-based health and care brands company operating in plant, animal and human health in a statement.

CEO Dr Karsten Wellner said Ascendis is targeting to achieve 30% of its revenue in offshore markets in the medium term, adding that the acquisition is aligned with the firm's international growth strategy of diversifying across different markets and increasing foreign-denominated earnings.

Madrid-based Farmalider develops and manufactures mainly generic pharmaceutical products, with a market leading position in the ibuprofen and paracetamol markets in Spain. It also specialises in research, development, licensing and supply of products in generic prescription drugs, over-the-counter (OTC) and food supplement segments of the consumer health market.

Wellner said the acquisition offers good growth potential and provides Ascendis with an entry into the attractive €23bn Spanish pharmaceutical market, one of the five largest markets in Europe.

“Ascendis will gain access to Farmalider’s portfolio of over 200 pharmaceutical dossiers, which our South African-based Pharma division can use in South Africa and in the rest of Africa."

According to the statement Farmalider will also serve as a strategic platform for Ascendis to expand into Europe due to its established presence in major markets including Germany, United Kingdom, Italy, France, Portugal, Belgium and Sweden. Farmalider is also in the process of entering Latin American markets through its office in Miami.

Farmalider also has a growing portfolio of OTC products which will provide the Ascendis consumer brands division with an additional established route to market in Europe. This will also ensure a strong pipeline of new products on the back of its research and development facilities in Europe, said Wellner.

“Internationalisation is a great opportunity for Ascendis but, also based on my extensive experience in international pharma markets, we are cognisant of its challenges.

"We are following a partnership approach by phasing in our ownership as we get to know the business and the broader European pharmaceutical market. However, we certainly believe this is a great deal and a real game changer for Ascendis,” Wellner said.

Ascendis shares traded 0.32% firmer at R15.90 by 11:02.


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