Lotus Pharmaceutical climbs on US drugmaker deal

ACQUISITIONS ABOUND::Shareholders approved takeovers of Alvogen subsidiaries, which would expand Lotus’ revenue to about US$100 million this year, the firm said

By Camaron Kao  /  Staff reporter

Tue, Feb 18, 2014 - Page 13

Shares of Lotus Pharmaceutical Co (美時化學製藥), which makes and distributes oral and injection medicine, soared 6.89 percent in Taipei trading yesterday after shareholders agreed to let US-based drugmaker Alvogen Group acquire 67 percent of the firm’s shares for US$200 million.

Based on the deal, Alvogen Group will hold 151.1 million Lotus shares for three years before it can dispose of them. The US investor would gain more than half of the seats on Lotus’ board, with Charles Lin (林東和) remaining chairman of the company.

In December last year, Lotus announced an intended share sale to Alvogen Group at NT$39.50 per share. Lotus shares have increased 63.57 percent over the past three months closing at NT$105.50 yesterday.

Shareholders also agreed yesterday for the company to spend US$180 million to seize 100 percent of South Korea-based Alvogen Korea and Taiwan Alvogen, 98 percent of shares of India-based Alvogen Pharma India Pvt and 95 percent of shares of China-based Alvogen Asia. The acquisitions are expected to increase Lotus’ revenue to about US$100 million this year from NT$656.75 million (US$21.73 million) last year, the company said.

Alvogen Korea’s annual revenue is about US$68 million to US$70 million, while annual sales at the other three companies are about US$10 million each.

“These transactions will allow us to enter Korean, Indian and Chinese markets,” deputy spokesman Ben Chung (鍾啟川) said. “Drug prices in South Korea are about 1.8 times the prices in Taiwan.”

The Taiwanese firm said it will see its capitalization rise to NT$2.2 billion from NT$740 million after the latest transactions, with its product portfolio increasing to about 300 items.

The firm added that it will focus on developing drugs for treating cancer and high blood pressure, blood sugar and cholesterol.

Lotus plans to file eight abbreviated new drug applications in the US for its new products this year and next year, aiming in the long term to become Taiwan’s top pharmaceutical firm by revenue and one of Asia’s the top five, Chung said.