Announcing its first international acquisition, Ascendis Health has purchased a 49 per cent stake of Farmalider SA, for R210 million. The deal includes the right to acquire the remainder of the business in two further transactions over the next five years.
Farmalider, which is based in Madrid, Spain, develops and manufactures mainly generic pharmaceutical products, with a market leading position in the country’s ibuprofen and paracetamol markets.
Focused on foreign growth
Ascendis’ CEO, Dr Karsten Wellner, says the acquisition is aligned with the company’s international growth strategy of diversifying across different markets and increasing foreign denominated earnings. ‘We are targeting to achieve 30 per cent of our revenue in offshore markets in the medium term.’
The acquisition provides Ascendis with an entry into the attractive €23 billion Spanish pharmaceutical market, which is said to be one of the five biggest markets in Europe. Farmalider will also serve as a strategic platform for the South African company’s plans of increased expansion on the continent. This is due to its presence already established in major markets including Germany, the UK, Italy, France, Portugal, Belgium and Sweden. Farmalider is also in the process of entering Latin American markets through its office in Miami.
Dr Wellner believes 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 locally and throughout Africa. Farmalider also has a growing portfolio of innovative over-the-counter (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 R&D facilities in Europe.
The right fit
Founded in 1986, Farmalider specialises in research, development, licensing and supply of products in the generics, 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 its portfolio of customers,’ adds Dr Wellner. ‘The inspirational and experienced owner, José Louis Berenguer, and the other founding shareholders, are committed to our partnership and to leading the business until at least 2020.’
Berenguer comments: ‘Importantly, we are aligned with 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 per cent of Farmalider at pre-determined multiples from the founding shareholders in two respective tranches, in 2018 (31 per cent) and 2020 (20 per cent).
‘Internationalisation is a great opportunity for Ascendis. However, based on my extensive experience in international pharma markets, we are cognisant of the 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. We certainly believe this is a great deal and a real game changer for Ascendis,’ Dr Wellner concludes.