Aspen AstraZeneca Anaesthetics Portfolio Agreement

09/06/16:

Aspen Holdings is pleased to announce that its wholly owned subsidiary, Aspen Global Incorporated (“AGI”), has signed an agreement with AstraZeneca AB and AstraZeneca UK (“AstraZeneca”) whereby AGI will acquire the exclusive rights to commercialise AstraZeneca’s global (excluding the USA) anaesthetics portfolio (“the Transaction”).

AstraZeneca’s anaesthetics portfolio comprises seven established medicines, namely Diprivan (general anaesthesia), EMLA (topical anaesthetic) and five local anaesthetics (Xylocaine/Xylocard/Xyloproct, Marcaine, Naropin, Carbocaine and Citanest) (“the Portfolio”). The products in the Portfolio are sold in more than one hundred countries worldwide including China, Japan, Australia and Brazil. These products generated revenue of US$ 592 million in the year ended 31 December 2015.

The Transaction

In terms of the concluded agreement, as consideration for the commercialisation rights, AGI will pay US$520 million and double-digit percentage royalties on sales of the Portfolio. Additionally AGI will make sales related payments of up to US$250 million based on sales in the 24 months following completion. AGI and AstraZeneca have also signed a supply agreement whereby AstraZeneca will supply the anaesthetic products to AGI. This supply agreement has an initial period of 10 years.

The commercial activities will transition to AGI in the short to medium term in accordance with an agreed plan. During the transition period AstraZeneca will continue to provide certain commercialisation services to AGI.

Based on the terms of the agreements and Aspen’s current cost of funding, Aspen’s interest in the Portfolio would have generated a contribution to profit before tax of approximately US$100 million in the year ended 31 December 2015.

Funding

AGI’s upfront investment will be funded from new debt facilities which have been secured.

Rationale

A key element of AGI’s inorganic expansion strategy is to acquire products within therapeutic areas that are both niche in nature and complementary to its existing operations. To this end, AGI has identified anaesthetics as a therapeutic category that presents the opportunity to add significant value to the Aspen Group. As a category of pharmaceuticals that primarily involves sterile manufacturing and that is dispensed largely in hospitals and clinics, anaesthetics present an opportunity to leverage both Aspen’s existing hospital focused sales force that is currently promoting anti-coagulants and, potentially in due course, sterile manufacturing capabilities. Furthermore, the key territories in which the Portfolio is sold represent an excellent fit with Aspen’s existing operational geographic footprint and those markets on which its future strategy is focussed.

By entering into the Transaction, Aspen gains immediate access not only to a global portfolio of exceptionally strong brands but also to the scientific and strategic expertise of AstraZeneca, one of the world’s major pharmaceutical companies and a leader in the area of anaesthetics.

Completion

The transaction is subject to customary closing conditions and is anticipated to complete during the first quarter of Aspen’s 2017 financial year.

Categorisation of the Transaction

The Transaction is categorised as a Category 2 transaction in terms of the JSE Limited Listings Requirements.

Durban, 9 June 2016

Sponsor: Investec Bank Limited                                                                                             

 

About AstraZeneca’s anaesthetics portfolio

  • Carbocaine (mepivacaine) Local Anaesthesia solution for injection for the following techniques: local infiltration, minor and major nerve blocks, epidural block and arthroscopy.
  • Citanest (prilocaine) Local Anaesthesia solution for injection for the following techniques: local infiltration, minor and major nerve blocks, Epidural block, arthroscopy and intravenous regional anaesthesia.
  • Diprivan (propofol) Short acting intravenous sedative / anaesthetic for the following: induction / maintenance of general anaesthesia, sedation of ventilated ICU patients and conscious sedation for surgical / diagnostic procedures.
  • EMLA (lidocaine + prilocaine) Topical Anaesthetic 1g Cream/single patch contains a eutectic mix of 25mg of each of two local anaesthetics (lidocaine & prilocaine), for the following:

Cream Anaesthesia of skin for needle insertion, superficial surgical procedures, genital mucosa (eg, prior to superficial surgical procedures or infiltration), leg ulcers, to facilitate mechanical cleansing/debridement

Patch Anaesthesia of intact skin in connection with minor procedures, such as needle insertion and surgical treatment of localized lesions

  • Marcaine (bupivacaine) Local Anaesthesia solution for injection for the following: local anaesthesia including infiltration, minor and major nerve blocks, epidural block and arthroscopy.
  • Naropin (ropivacaine) Local anaesthesia solution for injection for the following:

Surgical anaesthesia epidural block for surgery, including caesarean section, intrathecal, major nerve block and field block

Acute pain management: continuous epidural infusion or intermittent bolus, field block, intra-articular injection, continuous peripheral nerve block infusion or intermittent injections

Acute pain management in paediatrics for peri-and postoperative pain; caudal epidural block, peripheral nerve block

  • Xylocaine (lidocaine / lignocaine) Local Anaesthesia solution for injection for the following: local infiltration, minor and major nerve blocks, epidural block, arthroscopy, intravenous regional anaesthesia and topical anaesthesia.

About Aspen

Aspen is a leading global player in specialty and generic pharmaceuticals with an extensive basket of products that provide treatment for a broad spectrum of acute and chronic conditions experienced through all stages of life. Aspen continues to increase the number of lives benefitting from its products, reaching more than 150 countries.

Aspen has a strong presence in both emerging and developed countries. Its emerging market footprint includes Sub-Saharan Africa (where it is the largest pharmaceutical company), Latin America, South East Asia, Eastern Europe and the Commonwealth of Independent States, comprising Russia and the former Soviet Republics. From a developed world perspective Aspen is one of the leading pharmaceutical companies in Australia and has a growing presence in other developed countries, most notably in Western Europe.

Aspen operates with an established business presence in approximately 50 countries spanning 6 continents and employs more than 10,000 people. The Group operates 26 manufacturing facilities across 18 sites. Aspen holds international manufacturing approvals from some of the most stringent global regulatory agencies including the FDA, TGA and EMA. Aspen’s manufacturing capabilities are scalable to demand and cover a wide variety of product-types including oral solid dose, liquids, semi-solids, steriles, biologicals, APIs and INs.

Aspen, with a market capitalisation of approximately $10 billion, is the largest pharmaceutical company listed on the JSE Limited (share code: APN) and ranks amongst the top 20 listed companies on this exchange.

About AstraZeneca

AstraZeneca is a global, innovation-driven biopharmaceutical business that focuses on the discovery, development and commercialisation of prescription medicines, primarily for the treatment of cardiovascular, metabolic, respiratory, inflammation, autoimmune, oncology, infection and neuroscience diseases. AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide. For more information please visit: www.astrazeneca.com