Lotus Pharmaceutical Co (美時化學製藥), which makes and distributes oral and injection medicine, yesterday inked a cooperation deal with US-based drug maker Alvogen Group Inc, allowing Alvogen to acquire around 60 percent of its shares for US$200 million.
The deal still has to be approved by shareholders of Lotus Pharmaceutical, the company said.
“Lotus Pharmaceutical can achieve greater market access through this cooperation, and both companies can have a stronger portfolio because we have a different product-mix,” company chairman Charles Lin (林東和) said at a press conference.
Asked whether Lotus Pharmaceutical will have less control over its future direction, Lin said Alvogen and Lotus Pharmaceutical will both have a say in the company’s future decisions.
The Taiwan-based firm plans to sell up to 154.11 million shares at NT$39.5 per share to Alvogen through a private placement after the deal is approved by its shareholders.
Lotus Pharmaceutical plans to use the proceeds to finance research and development and set up international retail chains, especially in the US, the company said.
Both parties have agreed that Lotus Pharmaceutical will make drugs for Alvogen, especially those to go on sale in Asia.
The companies are to also cooperate on strategies for the markets in China, India, Thailand, Myanmar, Singapore, Malaysia and South Korea.
“Our costs for making drugs for the Asian market are lower than Alvogen’s, and we will start by making Alvogen’s oral medicine for the treatment of cancer,” Lotus Pharmaceutical chief finance officer Ben Chung (鍾啟川) said.
Lotus Pharmaceutical makes 300 million pills a year.
Alvogen is to assist Lotus Pharmaceutical to apply for drug permits in the US and sell its drugs in the country.
It also plans to help Lotus Pharmaceutical to enhance its research and development capabilities, the Taiwanese company said.
Alvogen’s annual revenue is about US$400 million, Lotus Pharmaceutical said, adding that Alvogen’s sales to the US and Europe each account for 50 percent of its revenue.
From January through last month, Lotus Pharmaceutical posted revenue of NT$577.46 million, up 29.39 percent from a year ago, according to the company’s filing to the Taiwan Stock Exchange.
“One of our cancer treatment drugs successfully entered the Japanese market in October, and its sales will help our revenue to grow significantly, starting November,” Lin said.
During the first nine months of this year, the company reported profit of NT$26.99 million, or NT$0.47 per share, up from losses of NT$116.47 million, or NT$2.62 per share a year ago, according to company data.
Lotus Pharmaceutical’s shares rose 1.2 percent yesterday on the GRETAI Securities Market, outperforming the over-the-counter market’s 0.68 percent decline.