JSE-listed Aspen’s fully-owned Mauritius subsidiary Aspen Global Incorporated (AGI) on July 31 concluded an agreement to acquire from Viatris the commercialisation rights and related intellectual property for a portfolio of well-known branded products in Latin America.

The fair value of the products has been determined by AGI as $280-million. AGI will settle the consideration through a cash payment of $150-million and an extension of supply terms to Viatris.

Viatris is a major global pharmaceutical company, publicly listed on the New York Nasdaq and with principal offices in Canonsburg, Pennsylvania, in the US.

The assets relating to the products being acquired comprise intellectual property required for their commercialisation, and any related goodwill owned by Viatris and its subsidiaries; product registrations and marketing authorisations; and the related inventory.

The key products within the portfolio are sold under the brand names, Lipitor, Viagra, Lyrica, Zoloft, Norvasc and Celebrex.

The transaction is conditional upon the approvals of the competition authorities in Ecuador and Colombia.

It is anticipated that the transaction will complete on or about October 1.

As part of the transaction, a number of employees engaged in the commercialisation of the products will transfer to the local subsidiaries of Aspen.

AGI and Viatris will also conclude supply agreements whereby AGI will be supplied with the products for at least seven years.

The products generated sales of about $92-million in the year ended December 31, 2022. Owing to the way the products have been integrated into Viatris’ business, it is not possible to accurately determine or estimate the profit attributable to the products within Viatris.

It is expected that the gross margin from the products should be higher than Aspen’s Commercial Pharmaceutical segment gross profit percentage for the six months ended December 31, 2022, of 60%.

The transaction represents an attractive opportunity for Aspen to expand its presence in one of the group’s key regions, it highlights.

In doing so, Aspen will acquire a basket of well-established, post-patent brands that will complement its existing portfolio and add to the scale of its business in this region.

Moreover, the acquisition of a dedicated and experienced sales team will materially enhance Aspen’s commercial capabilities, further strengthening its foundations for future growth in Latin America, it points out.

AGI’s upfront cash consideration will be funded from existing debt facilities.