GSK ASPEN HEALTHCARE FOR AFRICA
The Group has been seeking to increase its business in sub-Saharan Africa
for a number of years. In May 2008 the first step was taken in pursuit
of this objective with the purchase of 60% of Shelys . This business
performed well over the past year and is set to launch a number of new
products during the next year with a particular concentration on the
branded and OTC products in the private sector in East Africa. Completion
of the GSK transactions will substantially increase the Group’s involvement
in the region. GSK is a leading multinational pharmaceutical company
in the region, having recorded revenue of GBP62 million in the year ended
31 December 2008. The GSK brands have established credibility and with
more than 260 representatives, have wide coverage and an effective
distribution network. The supplementation of GSK’s existing portfolio
with Aspen’s pipeline of relevant products should allow the collaboration
to increase access to quality healthcare in sub-Saharan Africa under
the “GSK Aspen Healthcare for Africa” identity. Shelys will not form
part of the collaboration at this stage.
GLOBAL BRANDS INCREASED
The Group’s portfolio of global brands is a key component of Aspen’s
international strategy. The global brands are specialised products with
established credibility and strong brand equity among doctors and patients
across the world. Aspen plans to use the recognition and acceptance of
these products as a foundation on which to grow its business in selected
markets by introducing promotion and representation of a product portfolio
which is expanded by the addition of the Aspen pipeline. The global brands
are distributed in approximately 100 countries across the world. The
four global brands acquired from GSK with effect from 30 June 2008 were
initially distributed by GSK in terms of the transition arrangements.
Almost all markets will have moved to the Aspen global distribution network
by the end of the 2010 financial year.
The existing portfolio of global brands will be increased by the addition
of eight further products, which recorded sales of more than GBP50 million
in the year ended 31 December 2008, upon completion of the GSK transactions.
Alkeran, Leukeran, Purinethol, Lanvis and Myleran are all oncolytics
and will provide synergy in territories in which Aspen promotes products
from the oncology joint venture with Strides. The remaining three products
are Kemadrin for the treatment of Parkinson’s disease, Trandate, for
the treatment of high blood pressure and Septrin, an anti-microbial.
Many of the acquired products are manufactured at the Bad Oldesloe Facility
in Germany which forms part of the GSK transactions. By acquiring this
manufacturing site the Group gains control over the production of a material
component of the global brands and also adds an important trans-European
distribution capability. Bad Oldesloe is highly automated and comes with
an exceptionally capable technical team from whose skill and knowledge
the operations of the Group in all territories should benefit.
GREAT POTENTIAL IN LATIN AMERICA
Latin America has been a target territory for the Group for a number
of years. The region is characterised by the complexity of multiple individual
markets, barriers to entry and developing economies with strong demand
for pharmaceuticals. In 2008 Aspen acquired 50% of businesses in Brazil,
Mexico and Venezuela. This shareholding was raised to 51% with effect
from July 2008 and full ownership will be achieved in the year ahead.
Aspen has now experienced the regulatory and cultural challenges of doing
business in Latin America first hand. Despite the obstacles presented
in these markets, the region represents great future growth potential
for the Group and is receiving considerable executive focus. Specific
attention is being given to changing the business models of the companies
and redirecting focus to branded business in the private sector. Interventions
have been made to strengthen management. Investment in sales representation
has been necessary to provide coverage over large geographies. In Brazil,
160 new sales representatives were employed and initiatives are underway
to increase the sales force in Mexico and Venezuela. New products have
been added to the portfolio, including the launch of the first biosimilar
insulins in Brazil. The Group has already established a valuable product
pipeline for the region which will represent an excellent growth driver
into the future. While there are undoubtedly further hurdles Aspen will
need to clear before the Group is fully established in Latin America,
the opportunities are most exciting.
ASIA PACIFIC OPPORTUNITIES BEING EXPLORED
The Asia Pacific region is another territory in which Aspen is seeking
new growth opportunities. Building off the very successful business in
Australia, regional management responsibilities have been assigned and
the opportunities in these markets are being assessed.
ASPEN TEAM HAS DELIVERED
The globalisation of Aspen has tested and proven the exceptional executive
team that has been instrumental in successfully delivering on this strategy.
The Group has also welcomed many very capable additional members to the
Aspen team in our new affiliates. They join the existing group of employees
whose competence and commitment provided the confidence that was needed
for Aspen to embark on the international expansion in the first place.
The Board of Directors has provided expert guidance in business direction
and has ensured that corporate governance is an essential element of
Aspen’s culture. My personal thanks go to the Chairman, Dr Judy Dlamini,
for her unstinting support.
WELL POSITIONED
Aspen has a great business in South Africa which is set to consolidate
its position in this market. The international strategy has been successfully
implemented and there are promising opportunities in new markets.
The Group is well positioned for further rewarding growth.
Stephen Saad
Group Chief Executive
22 October 2009 |
