Valeant to Acquire Tecnofarma to Pad Generic Business in Latin America
Tecnofarma is expected to add $33 million in annual sales, a pipeline of drugs, and production plants.
Valeant Pharmaceuticals is taking over Tecnofarma, a privately held company located in Mexico that produces generic pharmaceuticals. Tecnofarma makes approximately $33 million in annual sales, primarily to the government and private label markets, according to Valeant.
Valeant’s current operations in Mexico does not currently serve these two segments. Additionally, Tecnofarma has a number of manufacturing sites including a 160,000 sq. ft. plant, which will allow Valeant Latin America to reduce its dependence upon third-party manufacturers. Finally, Tecnofarma has 80 registered products that can be introduced into the branded generic market in Mexico.
“The government and private label markets in Mexico are large and growing components of the overall pharmaceutical industry in the region and are complementary to Valeant Mexico's current market focus on the commercial branded generic market,” comments J. Michael Pearson, chairman and CEO. “Adding two well-established businesses to our current branded generic portfolio mix, a new pipeline of products for our branded generic business, as well as a manufacturing infrastructure capable of expanding to meet future demand, we believe we are well positioned to reach our growth objectives in Latin America.”
Since December 2006 Valeant has systematically sold businesses and restructured operations to concentrate on three areas: specialty pharmaceuticals in North America, which is largely in dermatology; branded generics in Europe; and branded generics in Latin America.
Sales in Latin America during the first quarter increased 47% to $31.2 million from $21.2 million in the same period last year. Sales dropped from the fourth quarter of 2008, however, which logged $36.9 million. Valeant says that product sales in the current first quarter were impacted by unfavorable currency fluctuations of $10.1 million as compared to the first quarter of 2008. At constant exchange rates, product sales in Latin America in the first quarter of 2009 increased 94% from last years’ first quarter.