GSK sells two brands to Aspen for $1.13 billion

DURBAN, South Africa—GlaxoSmithKline (GSK) and Aspen Global Incorporated, a wholly owned subsidiary of Aspen, have established an agreementby which GSK will sell Arixtra and Fraxiparine, its thrombosis brands, and itsmanufacturing site at Notre-Dame de Bondeville to Aspen for £700 million(approximately $1.13 billion) in cash. Of that sum, £100 million (approximately$161.7 million) is related to inventory. GSK plans to use the proceeds forgeneral corporate purposes.

"This deal presents excellent synergistic opportunities forAspen's ongoing global expansion strategy," Stephen Saad, Aspen Group chiefexecutive, said in a press release regarding the agreement. "In conjunctionwith the successful completion of an announced transaction with MSD, theopportunity exists to pursue a more vertically integrated supply chain forheparin based products, leading to benefits such as production/inventoryplanning and economies of scale in procurement. The brands to be acquired havestrong brand equity and established demand in the markets where they have beenpromoted and provides Aspen with a market presence in some additional 30countries."

Under the terms of this transaction, Aspen will acquireglobal rights to the two brands—with the exception of China, India and Pakistan—aswell as certain dedicated commercial employees, the Notre-Dame de Bondevillemanufacturing site and the majority of the employees at said site. GSK willcontinue to distribute and market the brands in Indonesia under license fromAspen. If regulatory approvals are secured, the bulk of commercial operationsare expected to be transferred to Aspen by the end of the year, with theremainder, including the Notre-Dame de Bondeville site, to follow in the firsthalf of next year. Aspen is a leading generics manufacturer in the southernhemisphere, currently holding position as Africa's largest pharmaceuticalmanufacturer. GSK currently has an 18.6 percent holding in Aspen.

"Arixtra and Fraxiparine are established products that haveconsistently delivered strong revenues. However, our focus is on delivering anunprecedented late-stage pipeline and preparing for the launch of approvedmedicines," David Redfern, chief strategy officer at GSK, commented in astatement. "Aspen is a long-term partner of GSK and will be able to dedicatethe resources that these products deserve to take them forward. Importantly, weare pleased to be able to preserve the vast majority of jobs through thisagreement."

In addition, AGI will be entering into a put/call optionagreement related to the rights to Arixtra and Fraxiparine in China, India andPakistan, with an option period beginning on January 1, 2018. The price will bedetermined at the time the option is exercised.

Aspen also announced the finalization of its acquisition ofactive pharmaceutical ingredient (API) manufacturing operations and relatedbusinesses from Merck & Co. the same day. The transaction is part of aseries of deals with Merck announce on June 18, which includes the API businessand an option to purchase a portfolio of 11 branded finished dosage formmolecules.

SOURCE: Aspen press release