Drug maker Apotex Inc. has sold its operations in five European countries in an effort to focus its business amid a major restructuring.
In an expected move, the privately held Canadian generic-drugs manufacturer announced Saturday that it had offloaded assets in the Netherlands, Poland, the Czech Republic, Spain and Belgium to Indian pharma giant Aurobindo Pharma, in a deal worth €74-million ($114-million).
Aurobindo’s European product portfolio will increase by more than 200 generic drugs, more than 20 drugs in a two-year pipeline and more than 80 over-the-counter products through the deal, which is conditional on clearance from Dutch and Polish authorities.
“This is a positive move for our organization and enables us to further accelerate our efforts to drive additional growth in the Americas, while also creating manufacturing capacity to meet growing demand,” Apotex chief operating officer Jeff Watson wrote in a company news release. Apotex declined to comment about whether it will still sell its drugs across Europe, and also wouldn’t say what its new manufacturing capacity will look like.
Mr. Watson has said that Canada will remain Apotex’s primary market while the company increasingly turns its attention to the United States, a key market where the three largest buyers have made up 90 per cent of drug purchasing in recent years. The sale of Apotex’s European division to focus on the Americas was forecast as early as February.
Mr. Watson took the COO role at Apotex this year after months of churn and tumult; the company’s founder, Barry Sherman, and his wife, Honey, were found dead in their Toronto mansion in December, later determined by police to be a homicide. Just weeks after the couple’s high-profile memorial ceremony, Apotex CEO Jeremy Desai abruptly resigned.
Mr. Desai had been tangled in a messy lawsuit alleging that he stole trade secrets from Apotex rival Teva Pharmaceutical Industries Ltd., with help of a Teva executive with whom he’d had an affair. Former Apotex CEO Jack Kay, then 77, returned after Mr. Desai’s resignation to steer the ship. Mr. Watson, a long-time protégé of Mr. Kay’s, was appointed COO and runs the company’s day-to-day operations.
Apotex’s staffing shakeup has come amid industry-wide turmoil that has seen a reduction in the amount governments spend on drugs as well as a wave of consolidations and partnerships between drug makers and major pharmacies, especially in the United States,
Mr. Watson told The Globe this spring that Apotex’s geographic footprint and supply chain was set to change. He said the company’s drug portfolio was likely to shrink in order to pursue a “tighter, more focused approach,” which had begun to take shape before Mr. Sherman’s death.
Apotex has cut staff from its headquarters in Brantford, Ont. In May, the company merged its Australian business with rival Arrow Pharmaceuticals to produce and market almost 500 drugs – becoming one of Australia’s largest drug manufacturers.
Apotex declined to comment Monday on how far along it is in the restructuring plans.
Europe has been a thorny market for Apotex in recent months. Late last year, the British Medicines and Heathcare Products Regulatory Agency pulled the manufacturing certificate from Apotex’s Indian operation, and restricted the importation of drugs made there. All European Union member states were instructed to restrict imports from the plant until further inspection.
Meanwhile, Europe has been a target market for Aurobindo, particularly in the east. With the new deal signed, Aurobindo said it would rely on the established brand name “APO” particularly in Poland.
“We expect a seamless integration of the acquired businesses with the rest of the Aurobindo group,” Venugopalan Muralidharan, senior vice-president of European operations, said in the company announcement.