Sandoz To Acquire Aspen Pharmacare’s Japanese Business in $440-M Deal
Novartis’ Sandoz has agreed to acquire the Japanese business of Aspen Global Inc. (AGI), a wholly owned subsidiary of the specialty and branded pharmaceutical company, Aspen Pharmacare, for up to EUR 400 million ($440 million). Aspen’s portfolio in Japan consists primarily of off-patent branded medicines with a focus on anesthetics and specialty brands.
Under the agreement, the disposal of Aspen’s Japanese operations to Sandoz comprises the intellectual property and any related goodwill owned by AGI and the transfer of all of AGI’s shares in Aspen Japan KK to Sandoz.
The planned acquisition consists of shares in Aspen Japan KK and associated assets held by AGI. On closing, Sandoz will pay an initial cash consideration of EUR 300 million ($331 million). Sandoz has also agreed, upon certain conditions being fulfilled after closing, to pay certain deferred consideration to AGI. It is currently anticipated that the amount of deferred consideration to be paid will not exceed EUR 100 million ($110 million). The deferred conditional consideration relates to milestone payments to be made to AGI contingent upon achieving certain supply criteria and licensing opportunities. It is expected that all milestones earned will have been received by December 31, 2023.
Aspen’s portfolio in Japan comprises approximately 20 products, now off-patent branded medicines with a focus on anesthetics (including Xylocaine (lidocaine), a local anesthetic agent), specialty brands (including Imuran (azathioprine), an oral treatment for rheumatoid arthritis) and local brands. Full-year sales for the fiscal year ending in 2019 were EUR 130 million ($143 million). Sandoz currently has a portfolio and pipeline of hospital generic and biosimilar products with a dedicated sales, marketing and medical organization.
Additionally, AGI has entered into a five-year manufacturing and supply agreement (with an additional two-year extension option) with Sandoz, which will take effect from completion of the transaction, for the supply of active pharmaceutical ingredients and semi-finished and finished goods related to the portfolio of divested brands.
Completion of the transaction is conditional upon certain customary conditions precedent being fulfilled, such as consent of lenders in terms of Aspen’s syndicated debt facilities and anti-trust approval from the Japan Fair Trade Commission. The transaction is expected to occur in the first half of 2020.
Aspen Japan K.K. is a wholly owned subsidiary of AGI and forms part of the Aspen Group, which is headquartered in Durban, South Africa.