Ascendis Health sells pharmaceutical manufacturing facility to Mylan
The deal is worth R30 million.
JSE-listed healthcare group Ascendis Health has concluded a sale agreement of its pharmaceutical manufacturing facility to Mylan, which is one of the world’s leading pharmaceutical companies, for R130 million.
The manufacturing plant is based in Isando in Gauteng, South Africa’s economic hub.
The sale of the manufacturing facility forms part of Ascendis Health’s non-core asset disposal programme announced in 2018 following management’s strategic business review.
“After an extensive evaluation of our pharmaceutical manufacturing requirements we decided to sell the Isando plant owing to its low utilisation and to reduce the complexity of our South African pharmaceutical operations,” said Ascendis Health CEO Thomas Thomsen in a statement.
Mylan is a supplier of ARV and other oral solids to the national Department of Health (DoH). Mylan plans to manufacture ARV medicines and other oral tablets in the facility to supply the DoH. Ascendis Health has concluded a manufacturing and supply agreement with Mylan to continue producing the products currently being manufactured at the Isando plant.
The 28 000 m² plant was acquired through Ascendis Health’s purchase of Akacia Healthcare in 2015. The facility includes capsules, oral solids and semi-solids manufacturing and packaging as well as a quality control laboratory with a stability centre used to conduct physiochemical and microbiological tests for pharmaceuticals and complementary and alternative medicines.
Following the sale of the Isando plant Ascendis Health said it will be consolidating its pharmaceutical manufacturing into its facility in Wynberg, Gauteng.
Thomas said the cash proceeds from the sale will be applied mainly to reduce gearing levels and to fund the working capital requirements of the business. Part of the proceeds will be invested in upgrading the company’s supply chain, he said.
The transaction is subject to approval by the Competition Commission, South Africa’s competition authority.