Further expansion of branded generics, OTC and dermatology portfolio

Specialty pharmaceutical maker Valeant Pharmaceuticals today said that it had signed a binding agreement to acquire a private branded generics and over the counter (OTC) company located in Brazil for approximately $28 million.

Without identifying its acquisition, Valeant said that the Brazilian firm has annual sales of approximately $19M in 2009, mainly in the dermatology business.

A large portion of the company's product portfolio is in dermatology and the company had annual sales of approximately $19 million in 2009 and that over the past five years, this company has delivered a compound annual growth rate of nearly 15 per cent.

Valeant will also pay another $28 million to acquire a new 165,000 square foot manufacturing plant approved to produce solids, semi-solids and liquids. Both transactions, which are subject to customary closing conditions, are expected to close in the second quarter of 2010.

According to Valeant, the acquisition will advance its  presence in the dermatology segment in the Brazilian market.

"We are excited to advance our dermatology presence in the Brazilian market, which is one of the leading dermatology markets worldwide," said  J Michael Pearson, chairman and chief executive officer.

Pearson said "This acquisition gets us closer to building the critical mass we need in the Brazilian pharmaceutical market. The new state of the art manufacturing plant will allow us to close our current subscale manufacturing facility and eliminates the need for any third party manufacturers - the combination of which should allow us to significantly improve margins."

Valeant expects the two transactions to be collectively accretive to Valeant in 2010.