Abbott makes Latin America move
pharmafile | May 20, 2014 | News story | Manufacturing and Production, Sales and Marketing | AbbVie, Abbott, CFR, Chile, pharmerging
Abbott is to pay around $2.9 billion to secure its foothold in Latin America, buying Chile’s CFR Pharmaceuticals to double its branded generics business on the continent.
CFR, based in Santiago, has R&D and manufacturing sites in Chile, Colombia, Peru and Argentina and covers the whole of the region with a portfolio described by Abbott as ‘well aligned’ with its own preferred therapy areas of women’s health, central nervous system, cardiovascular and respiratory diseases.
Abbott is managing the deal by buying the holding company which indirectly owns around 73% of CFR, and will then make a cash tender offer for the outstanding shares – it expects the transaction to be completed by the end of September this year.
The $2.9 billion figure depends on Abbott getting them all and the manufacturer says it will also take on net debt of $430 million.
A key part of Abbott’s thinking is that it should add $900 million to its sales next year through the acquisition, with “expected double-digit sales growth over the next several years”.
Looking further ahead, the ‘pharmerging’ Latin American market is expected to total $73 billion in sales this year, reaching $124 billion by 2018, according to IMS forecasts.
And as with other commercially less developed areas, it has an estimated annual growth rate which is two to three times that of traditional, mature markets – figures which are of considerable interest to pharma as patent expiries and government payment issues take hold elsewhere in the world.
“With its scale and leadership positions in the region, strong commercial and development organisations, well-respected leadership team and a trusted portfolio of recognised brands, CFR is one of the leading branded generic companies in Latin America,” says Abbott chief executive Miles White.
“This acquisition will significantly enhance and broaden Abbott’s Latin American footprint, and is well aligned with our long-term strategy and commitment to fast-growing markets,” he adds.
CFR markets more than 1,000 products and has 7,000 employees – although there is no word yet on how staff would be integrated between the two companies.
CFR chief executive Alejandro Weinstein sees it as a chance to “enhance CFR’s leadership across Latin America” and says the company “will become part of an organisation much like itself”.
Abbott says it expects to see a year-on-year sales increase in the fourth quarter of the year, but says the deal has no impact on its full-year 2014 financial guidance previously provided.
Adam Hill
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