Lotus Pharmaceutical Co (美時化學製藥), which makes and distributes oral and injected medicine, yesterday said its future parent company Alvogen Inc spent US$187 million to acquire South Korean-based Dream Pharma Ltd, which is to be put under Lotus’ control once the deal is approved.
The US-based Alvogen, which makes generic drugs and biosimilars, plans to acquire the company through its South Koran subsidiary Kunwha Pharmaceutical Co, and the deal is still pending approval from the South Korean government, Lotus said.
Alvogen expects the deal to be completed in the fourth quarter of this year. The deal would make Kunwha the largest generic drug maker in South Korea, Lotus said.
The acquisition should strengthen Kunwha’s retail routes in South Korea and increase Kunwha’s product portfolio because the two companies sell different products, and Alvogen is set to sell its products to Taiwan and other markets in Asia using Alvogen’s networks, Lotus said.
“[The Asia-Pacific region] is one of the fastest-growing regions globally for generic pharmaceuticals. The market remains very fragmented, which provides an excellent opportunity for Alvogen to play a leading role in further industry consolidation,” Alvogen said in its statement yesterday.
Dream Pharma, a subsidiary of Hanwha Chemical Corp, which makes polyethylene, polyvinyl chloride plasticizer and base chemicals, reported revenue of about US$100 million last year, with 56 percent of that from sales of weight-loss drugs, Lotus said.
With 100 drugs currently in the pipeline, Dream Pharma accounts for 35 percent of the South Korean weight-loss drug market, according to Lotus.
“Dream Pharma is not a core business for Hanwha, and we believe we can increase its profit by adjusting Dream Pharma’s structure after acquiring it,” Lotus vice president Hung Yao-le (洪堯樂) said by telephone yesterday.
Alvogen is to spend US$200 million to acquire 67 percent of Lotus’ shares on Aug. 12, and Lotus also plans to spend US$180 million to seize 100 percent of South Korea-based Alvogen Korea and other Asian subsidiaries of Alvogen, Lotus said.
After Lotus acquired Alvogen Korea, Lotus would have a 67 percent stake in Kunwha, which posted a revenue of about US$80 million last year, Lotus said.
Both Dream Pharma and Kunwere in the black for last year, Hung said.
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