India’s Lupin buys into southern Africa

By Phil Taylor

- Last updated on GMT

Related tags Africa

Indian pharmaceutical company Lupin Ltd has expanded into Africa by acquiring a 60 per cent stake Pharma Dynamics, a generics company and contract manufacturer based in Cape Town, South Africa.

Like many of its Indian peers, Lupin is aggressively taking its business to international markets by a series of acquisitions. Last year it acquired a majority stake in Japan’s Kyowa Hakko, having earlier bought generics firms in Australia (Generic Health Pty) and Germany (Hormosan Pharma GmbH), as well as fellow Indian raw materials firm Rubamin Laboratories.

Lupin has made no secret of the fact that this policy is set to continue. Back in May the firm said it was eyeing acquisitions in the US, as well as emerging markets such as Latin America, Southeast Asia and the Middle East.

The move into South Africa poises the company to tap the largest market in Africa, and . Data from Piribo indicate that the market was worth $3.03bn in 2007 and should expand to $4.41bn by 2012, despite controls limiting pharmaceutical price rises, which indicates that there will be significant volume growth in the market.

"With the synergies of the two companies, we expect to be in the top league in the South African market very soon​," said Lupin's managing director Dr Kamal Sharma.

Lupin is thought to have paid about $25m for Pharma Dynamics, which reported annual sales of 118m rand ($14m) at the end of February 2008, a rise of nearly 40 per cent on the prior year.

Pharma Dynamics is currently ranked number six amongst South Africa’s generic companies. The founder, Paul Anley, will remain CEO of the with a significant equity holding and will continue as CEO of the organization. Pharma Dynamics has been operating for around seven years, combining development and sales of generic pharmaceutical, over-the-counter medications and nutraceutical products, marketing and distribution agreements with overseas drugmakers and contract manufacturing activities.

The firm has already started to expand geographically in southern Africa, initially in Namibia and Botswana, and Anley believes the deal with Lupin will accelerate the development of the business in the southern African markets.

The equity acquisition by Lupin gives us increased access to international research and development which will further strengthen our local position​,” he said, noting that Lupin’s involvement would help the firm pursue its strategy of cherry-picking the best products developed by international generics manufacturers and arranging to distribute them in the local market.

Pharma Dynamics already claims leadership of the generic cardiovascular medicine segment in South Africa, and in October last year became the first South African generics company to launch a generic version of an angiotensin II receptor antagonist, one of the fastest-growing classes of antihypertensive agents. And it has also recently launched a range of central nervous system (CNS) line of products and an imminent expansion into gastrointestinal medicines.

Pharma Dynamics said it plans to launch at least 12 new products in the current year, well ahead of the industry average of about four new products per year.

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