Aspen CEO Sees China Overtaking S. Africa as Biggest Market

(Bloomberg) -- Aspen Pharmacare Holdings Ltd. sees China eventually overtaking South Africa as its biggest market as the company completes its transition to a global therapeutics business from an Africa-focused generic-drugs maker.

The business sells medicines in more than 150 countries and is looking for partners as it expands in China, the Middle East and the U.S. The infant-milk formula market is just one area that represents a good opportunity in Asia’s most populous nation as the market consolidates, Chief Executive Officer Stephen Saad said.

“There’s about 2,000 brands in China and we think that’s going to go down to 500 as about three-quarters of them are not going to get registration,” he said in an interview in Johannesburg on Thursday. “We are going to focus on growing online and selling to mother-and-baby stores.”

Revenue from therapeutic brands, which include anesthetic and blood-clotting medicines, rose to 45 percent of first-half sales after the Durban, South Africa-based company said in September it would buy more rights to AstraZeneca Plc’s anesthetic medicines for $555 million. It made similar purchases in 2016. Saad said the company is generating enough cash for more deal making, particularly in emerging markets.

The shares rose 2.6 percent to 268.50 rand by 9:44 a.m. in Johannesburg, valuing the company at 123 billion rand ($10 billion). First-half earnings per share, excluding one-time items, climbed 26 percent to 8.72 rand.

“Four years ago, Asia was less than 10 percent of total commercial pharma revenue, while China is now no. 3 by sales and Asia is bigger than Australia,” the CEO said. “China has every opportunity to get to no. 1,” he added, declining to comment on how long it would take.

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