Ascendis Health today announced its first international acquisition with the purchase of a 49% stake in Spanish pharmaceutical group, Farmalider SA, for R210 million, with a right to acquire the remainder of the business in two further tranches over the next five years.
Madrid-based Farmalider develops and manufactures mainly generic pharmaceutical products, with a market leading position in the ibuprofen and paracetamol markets in Spain.
Chief executive officer, Dr Karsten Wellner, said the acquisition is aligned with the Ascendis international growth strategy of diversifying across different markets and increasing foreign denominated earnings. “We are targeting to achieve 30% of our revenue in offshore markets in the medium term.”
He said the acquisition provides Ascendis with an entry into the attractive €23 billion Spanish pharmaceutical market, one of the five largest markets in Europe. 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.
Dr Wellner said the acquisition offers good growth potential. “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. Farmalider also has a growing portfolio of innovative OTC products which will provide the Ascendis consumer brands division with an additional established route to market in Europe while ensuring a strong pipeline of new, highly innovative products on the back of its leading research and development facilities in Europe.
Founded in 1986, Farmalider specialises in research, development, licensing and supply of products in generic prescription drugs, OTC and food supplement segments of the consumer health market. Products are currently registered for commercialisation by regulatory agencies in over 25 countries globally. The group operates in several therapeutic fields including pain treatment, oncology, cardiology, ophthalmic and dermatology via its licensing-out arrangements with major drug manufacturers including Stada, Cinfa, Ratiopharm, Teva, Apotex, Novartis, Sanofi, Sandoz and Mylan.
“Farmalider has a very experienced team which will provide Ascendis access to many European opportunities through their portfolio of customers,” said Dr Wellner. “The inspirational and experienced owner, José Louis Berenguer, along with the other founding shareholders, is committed to our partnership and to leading the business until at least 2020.”
Mr Berenguer commented, “Importantly, we are aligned with the Ascendis management team on the strategy to globalise Farmalider’s pharma range and to extract synergies from the transaction.”
Ascendis has the option to purchase the remaining 51% of Farmalider at pre-determined multiples from the founding shareholders in two tranches in 2018 (31%) and 2020 (20%).
“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,” Dr Wellner said.