Aspen rallies on European thrombosis sale

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Aspen group says the deal supports its strategy to earn more of its revenue in emerging markets.

Aspen Pharmacare has reached a deal to sell the rights to its European thrombosis business as it continues to streamline its portfolio to pay down debt and improve returns for shareholders. It’s shares rose over 9% on the news.

Mauritian subsidiary Aspen Global Incorporated (AGI) is selling the commercialisation rights and intellectual property of the thrombosis portfolio to global pharmaceutical company Mylan for €642 million, plus the cost of the related inventory. Mylan has retained AGI as its distributor of the products, which include Arixtra, Fraxiparine, Mono-Embolex and Orgaran, in France. Aspen will receive €263 million upon completion of the deal, which is expected to be the end of the year, with the remaining €379 million payable next June.

The disposal follows a strategic review of its Europe CIS Commercial business last year. It said selling the commercialisation rights while continuing to manufacture and supply the products was an attractive option and supported its strategy of reshaping the group towards a greater concentration of revenue in emerging markets.The positive cash inflow from the proceeds of the disposal will allow Aspen to further strengthen its balance sheet and assist in establishing financial headroom for future investments,” the company said. “Mylan represents the ideal partner to acquire these assets given the company’s strength in Europe, commitment to the injectables and biosimilars space and comparable employee-first culture and values.”

The group will release full-year results later today that are expected to show a reduction in debt that will bring it close to its medium-term target. Net borrowings declined to around R35.2 billion at the end of June due to net cash generated for the period and the proceeds from disposals. Last year it sold its infant nutritional business, followed by the disposal of a portfolio of drugs distributed in the Asia Pacific region. Aspen’s debt has concerned investors, particularly after it was forced to ask its lenders for a temporary increase to its debt ceiling at the end of 2018.

Last last month, it said it would report revenue growth of 8-10% for the year to end-June while normalised headline earnings per share from continuing operations would be 7-11% higher.

Its shares retraced some of their gains to close 5.4% up at R141.33.

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