 "Sun Pharma to buy GSK's Opiates business in Australia")
The GSK opiates business, including manufacturing sites in Latrobe (Tasmania) and Port Fairy (Victoria) and its portfolio of products along with inventory, will be transferred to a subsidiary of Sun Pharma.
The financial details of the deal have not yet been disclosed. The product portfolio consists of poppy-derived opiate raw materials that are used in the manufacture of analgesics for treatment of pain. All employees from both sites will be offered employment by Sun Pharma, according to a company release. Analysts said the deal size would be in the range of $100-150 million. "The opiates division booked annual revenue of 60-70 million Australian dollars ($46-54 million) with single digit growth. We expect the acquisition consideration to be in the range of $100-150 million," a report by Elara Capital said.
GSK supplies 25 per cent of the world's medicinal opiate needs from poppy grown by farmers in Tasmania. Tasmanian supplies nearly 50 per cent of the world’s requirements for medicinal alkaloid used for the manufacture of pain-relieving medicine. The opiates are extracted from opium plants at GSK's factory in Port Fairy and are used in a range of pharmacy and prescription medicines worldwide. Over 90 per cent of the thebaine, codeine and morphine produced by GSK Australia is exported.
“Opiates have been an important part of our Australian business for many years, but as our portfolio transitions we believe now is the right time to hand this business over to someone else,” said Steve Morris, general manager, GSK Opiates.
The transaction is part of GSK's strategy to offload non-core businesses in Australia and focus on delivering innovative products.
The transaction is subject to customary closing conditions and regulatory and other approvals, expected by August 2015.
“The global opiates market holds good potential and the addition of GSK’s business will strengthen our position. The acquisition is a part of our strategy to building our portfolio of opiates,” said Iftach Seri, executive vice-president of the API business at Sun Pharma.
The Mumbai-based Sun Pharma earns over 75 per cent of its revenue from markets abroad. For the year ending March 2014, its overall revenue was $2.7 billion, to which the US contributed $1.6 billion.
SHINING DOWN UNDER
- According to analysts, the deal size would be in the range of $100-150 million
- GSK supplies 25% of the world's medicinal opiate needs from poppies grown by farmers in Tasmania