| Wed 2 Sep 2009, 14:33 | | THEE - The Competition Commission - Press Statement |
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JSE
THEE
THEE - The Competition Commission - Press Statement
PRESS STATEMENT
2 September 2009
Competition Commission approves pharma merger on condition that Abacavir is
out-licensed to generic manufacturers
The Competition Commission placed conditions in its approval of the
transaction between Aspen Pharmacare Holdings Limited ("Aspen") and the
pharmaceutical division of GlaxoSmithKline South Africa (Pty) Ltd ("GSK SA").
The condition requires that GSK grant licences to generic manufactures to
produce their patented drug `Abacavir`, used primarily for the treatment of
children with HIV.
This transaction forms part of a larger international transaction between the
parties to extend their collaboration. Aspen and GSK will in effect share
GSK`s trading profits equally in GSK SA`s business. The transaction
constitutes Aspen issuing 68.5 million newly listed shares which amount to a
16% shareholding that GSK will hold in Aspen. GSK will also be represented by
one non-executive director on the board of directors of Aspen and will be its
single largest shareholder.
The Commission considered the likely effects of this merger under current
market conditions as well as on potential competition in the future.
Under current market conditions the Commission found that the merging parties
competed in sixteen products. Even though the combined market shares in some
of these products are high, with the exception of `Abacavir`, the Commission
found that there was sufficient competition in these markets to satisfy its
concerns that there would be a substantial lessening of competition.
The Commission also analysed the likely effect of the merger on future
competition considering that a large number of GSK patents are due to expire
in the next few years, making them available to generic competition. The
Commission was particularly concerned with this aspect in the light of the
effective competition that the generic drug manufacturers are increasingly
providing to patent manufacturers.
However, the Commission found that competition from generic companies, both in
South Africa and internationally, would prevent the merged entity from
substantially lessening competition in the future.
In 2002 the Commission reached a settlement with GSK in another matter
following a complaint about the high cost of ARV`s in which GSK also agreed to
issue licenses to generic manufacturers.
In terms of this merger GSK is required to grant licences, on a non-exclusive
basis, to Adcock Ingram, Cipla Medpro, Ranbaxy, Biotech Laboratories and Feza
Pharmaceutical and any other interested generic manufacturer for the
manufacture and/or import of Abacavir, on terms and conditions no less
favourable than those granted to Aspen.
ENDS
Prepared by: FD Beachhead
Jennifer Cohen 011 214 2401/ 082 468 6469/ jennifer.cohen@fd.com
Dani Cohen 021 487 9021 / 082 897 0443 dani.cohen@fd.com
Senzi Dlamini 011 214 2420 / 073 494 0030 senzi.dlamini@fd.com
On behalf of: The Competition Commission
Further info:
Maarten van Hoven, Head of Mergers & Acquisition
012 394 3295 / 083 412 7885 maartenv@compcom.co.za
Jennifer Cohen
Managing Director, FDBeachhead
Johannesburg
FD
1st Floor, Lumley House, Rosebank Office Park
177 Jan Smuts Avenue, Parktown North
Johannesburg, 2193
T +27 (0)11 2142401
F +27 11 214 2405
M +27 (0)82 468 6469
www.fd.com
A member of FTI Consulting, Inc.
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