This $4 Billion Asian Drugmaker With U.S. Ops Just Went on the Market

Published: Sep 27, 2017

This $4 Billion Asian Drugmaker With U.S. Ops Just Went on the Market September 26, 2017
By Mark Terry, Breaking News Staff

CVC Capital Partners (CVC) and several other private equity owners of Alvogen are considering selling the company.

Alvogen is a privately-owned pharmaceutical company that focuses on developing, manufacturing and marketing generic, branded, over-the-counter (OTC) and biosimilar products worldwide. It has commercial operations in 35 countries and 2,800 employees. Its lines of business include product development, contract manufacturing and research (CMO), generic drugs, biosimilars and OTCs.

It has 350 marketed products in oncology, cardiology, respiratory and neurology. Its biggest market is in the U.S. In the U.S., it markets generics and offers third-party services as a CMO company. It also has a manufacturing site in Norwich, New York under the Norwich Pharmaceuticals name. It also has a plant in Romania and a packaging facility in Serbia.

According to Bloomberg, the controlling shareholders have held talks with Shanghai Pharmaceuticals Holding Co. regarding the sale of Alvogen’s U.S. business, according to unidentified sources. In the context of those discussions, Alvogen would maintain its Asian operations, as well as its activities in central and eastern Europe.

In 2015, CVC and a consortium of investors including the Singapore state investment company Temasek Holdings Pte acquired a controlling stake in Alvogen for about $2 billion.

Bloomberg notes, “Shanghai Pharma has stepped up its hunt for investments after missing out on the purchase of German generic drugmaker Stada Arzneimittel AG.The company is currently bidding for a stake in Arbor Pharmaceuticals LLC as well as Cardinal Health Inc. ’s Chinese distribution business, people familiar with the matter have said.”

Franck Le Deu, a senior partner at McKinsey & Co., told Bloomberg, “We do expect Chinese leaders across the healthcare sector to continue to push for internationalization of their business footprint. It is about diversification, access to more profitable markets.”

On Sept. 11, Alvogen’s subsidiary, Lotus Pharmaceuticals, announced that Celgene had filed a lawsuit on Sept. 6 in the U.S. District Court for the District of New Jersey that resulted in a stay of final U.S. Food and Drug Administration (FDA) approval of Lotus’ Abbreviated New Drug Application (ANDA) for up to 30 months. Lotus’s ANDA sought approval of a generic version of Revlimid.

Alvogen has 75 products in development and pending FDA approvals for the U.S. market. Annual sales for the products that have been filed and under development, according to IMS Health, have a potential value in excess of $25 billion.

On Sept. 6, Alvogen inked a partnership deal with VIVUS for the anti-obesity drug Qsymia. Alvogen will take care of regulatory, sales and marketing for the drug in the Republic of Korea.

“The agreement with VIVUS will reinforce our strong position in the Korean market,” said Peter Vazharov, Alvogen’s executive vice president, in a statement. “Qsymia, a leading proprietary anti-obesity drug, will complement Alvogen’s full range of anti-obesity portfolio in the market. VIVUS will benefit from Alvogen’s sales and marketing platform and successful track record in the anti-obesity segment, which we believe will help make Qsymia a success in Korea.”

Because Alvogen is a private company, revenue is not published, but Bloomberg believes any sale could be valued at $4 billion.

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