Wednesday, 9 December 2009

Hypermarcas consolidates its position in Brazil's generics market

It seems that the market for generic pharma products in Brazil -- estimated to surge 26% per annum -- is a lively and profitable one, judging by one recent deal. According to Pharma Times ("Pfizer beaten in battle for Brazil’s Neo Quimica") yesterday, major Brazilian company Hypermarcas -- which trades in hygiene and cleaning, beauty and food products and over-the-counter medicines -- has agreed to pay around 1.3 billion reals (about US$750 million) in cash and stock for Neo Quimica, one of the first laboratories to sell generics in Brazil. Earlier this year Neo Quimica opened a state-of-the-art factory in Anapolis; full-year revenues are expected to be 380 million reals, with earnings before interest, taxes, depreciation and amortisation coming in at around 95 million reals.

This deal will make Hypermarcas the fourth biggest company in Brazil's $4.5 billion pharmaceutical industry, with a pipeline of 150 new products for the next three years. In securing Neo Quimica, Hypermarcas fought off a $525 million takeover bid from New York-based Pfizer, which had previously contemplated a joint venture. According to Pharma Times,
"Neo Quimica would have ticked a lot of boxes for Pfizer which, like a number of big pharma players, is looking to the emerging markets, not least Brazil, as a growth driver as US and European sales of patent-sensitive drugs begin to fall. Pfizer has also expressed its interest in boosting its generics presence".

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