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We all have our “dining out” business stories. Among my favourites was how a low profile South African billionaire picked three businesses to list during the 1999 stock market bubble. As it was during the dot.com boom, my fledgling internet publishing start-up was one of them. That business never really got past first base, hampered by a Nasdaq-triggered dot.bomb and South African bandwidth starvation. But it was a very different story for the now R170bn market cap pharma giant Aspen which super entrepreneur Stephen Saad has taken from embryo to global player. After establishing a solid global footprint, Aspen is now attacking the biggest global market of all – still being driven by Durbanite Saad, but now cheered on by thousands of ecstatic shareholders. – Alec Hogg
(Bloomberg) — Aspen Pharmacare Holdings Ltd. plans to increase its Chinese presence as Africa’s biggest maker of generic drugs ramps up distribution of its low-cost pharmaceuticals in the world’s most populous country.
The South African company will add 350 sales representatives in China “in the next few months” and plans to later increase that to 500, Chief Executive Officer Stephen Saad said in an interview at the drugmaker’s headquarters in Durban on Tuesday. Aspen wants to tap demand in the country for high-quality drugs at low prices, he said.
“Aspen believes absolutely that it can expand quickly into a market such as China, because the critical thing when it comes to medicine besides the price point is quality of the product,” Saad said. “That is why we put so much effort into our manufacturing capabilities and manufacturing quality. We have the quality of drug that you can get in any multinational and it’s affordable.”
Aspen is seeking growth from the U.S. and Europe as well as China and other Asian territories, the CEO said. The company sells products such as hormones, steroids, infant formula and anti-retroviral medicines in more than 150 countries around the world. About 20 percent of revenue came from the Asia Pacific region in the six months through December, while South Africa remains the biggest contributor of sales.
Aspen bought anesthetics medicines from AstraZeneca Plc for $520 million plus add-ons last month, the latest in a string of deals, and is looking for other new products to complement the existing portfolio, Saad said. “In our next financial year we want to bed down the acquisitions that we have made,” Saad said. “And we want to identify other products that can build off this range.”
Regarding anti-retrovirals, the Aspen CEO said regional planning on distribution and manufacturing of the medicines used to treat those with HIV would be an “unbelievably good idea” as it would reduce bureaucracy and improve access to a wider range of drugs. Almost 37 million people were living with the virus in 2015, according to UNAIDS.
“The problem currently is that each of the smaller southern African countries now want their own packaging, their own registration fees, and the volumes are too small in places like Botswana and Namibia to justify that,” Saad said.
Aspen shares have gained 21 percent this year, valuing the drugmaker at 171 billion rand ($11.9 billion). The company is South Africa’s seventh-largest by that measure. The stock has increased more than 335 percent in the past five years.
The company has spent more than $2 billion on acquisitions from drugmakers including GlaxoSmithKline Plc and Merck & Co. in recent years to boost its array of medicines and manufacturing sites. London-based Glaxo sold down a 19 percent stake in the company in 2013 but remains a minor shareholder and has a stake in Aspen’s Japanese unit.
“Expanding our footprint will be quick, because of key acquisitions that we have already made, some of them quite recently,” Saad said.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.