Aspen teams up with GSK to extend foothold in Japan

JOHANNESBURG (Reuters) – South Africa generic drugmaker Aspen Pharmacare Holdings Ltd has teamed up with shareholder GlaxoSmithKline Plc (GSK) to extend its presence in Japan, a lucrative market for low-cost medicines, it said on Thursday.

Politicians in the world's second-biggest pharmaceutical market are lobbying for more generic drugs to go on sale to bring down the cost of healthcare for a rapidly ageing population.

Shares in Aspen climbed 3.4 percent to 351.8 rand by 1337 GMT, outpacing 0.8 percent rise in the benchmark JSE Top-40 index.

Under the deal, Aspen, Africa's biggest generic drugmaker, would sell a 25 percent stake in a newly established Japanese business to GSK, which already owns about 12 percent of Aspen.

GSK would transfer distribution rights of certain products to the new entity, Aspen Japan. GSK would also provide Aspen Japan with a pipeline of other generic medicines which it would be able to sell in future.

The drugs that GSK would move into the Aspen Japan portfolio generated sales of about $21 million in Japan last year and include antibiotic Augumentin for treating bacterial infections.

Aspen Japan would cost about 14 million pounds to set up with GSK contributing 3.5 million and the rest coming from Aspen.

The transaction is expected to be completed by the end of next year.

(1 US dollar = 0.6183 British pound)