Aspen Pharmacare to buy API business from Merck in $1 billion deal

South Africa's Aspen Pharmacare will buy some active pharmaceutical ingredient (API) from US drug firm Merck in a $1-billion deal in order to strengthen its European, Latin American and Asian business.

Stephen Saad, CEO of Aspen, said the acquisition would enable Aspen to achieve its strategic intent to globalise "by enabling Aspen to access a niche range of APIs and finished dosage products. He added, it would also increase Aspen's "representation across a number of additional territories and provide support to its growing global presence with a differentiated pipeline."

The deal comes just two weeks after Aspen agreed to buy British drug company GlaxoSmithKline's thrombosis brands and related manufacturing plant.

Aspen, South Africa's biggest pharmaceutical company, will buy from Merck its API manufacturing business located in the Netherlands with a satellite facility and sales office in Illinois in the US.

The deal also includes an option to acquire a portfolio of 11 branded finished dose form molecules from Merck covering a diverse range of therapeutic areas and include products that use APIs manufactured by the API Business.

Merck said that the finished dose form molecules recorded revenue of $248 million in 2012, with re than half of this revenue generated in Aspen's key strategic regions of Latin America and Asia Pacific with Europe being the other large territory.

The finished dose form molecules will be initially manufactured under the pre-existing Merck manufacturing arrangements in terms of a medium term supply agreement between Aspen and Merck.