Alvogen said today it is acquiring DreamPharma for $187 million cash, in a deal that creates one of South Korea’s largest generic pharmaceutical companies—and helps the buyer in its quest to become a top-five pharma within the Asia-Pacific market.

Alvogen said DreamPharma brings it a complementary portfolio of over 100 products—as well as a 35% market share in obesity products in South Korea.

Because those offerings do not overlap with the portfolio it has marketed since acquiring Kunwha Pharmaceuticals in December 2012, Alvogen said the consolidated business creates a strong platform for exports and a basis for introducing the Korean portfolio into other APAC markets.

According to its website, DreamPharma is the market leader in anti-obesity drugs, with products that it manufactures such as the appetite suppressant Furing; Panbesy (Phentermine) pills, indicated as adjuvant to a weight loss program requiring exercise, behavior modification and calorie restriction; and nutritional dietary supplements that include Multivitamin Phyto and Cytrics C.

“Dream is an excellent business and we are looking forward to collaborating with their high-caliber team as we work to fuel regional growth and to gain scale in the Korean market and a broader product offering,” Robert Wessman, Alvogen’s president and CEO, said in a statement.

Dream is the pharmaceutical business of Hanwha Group, a conglomerate whose businesses range from providing chemicals to hotel chains. Established in 1995 as a generic drug maker, DreamPharma last year posted 27.6 billion won ($26.7 million) in net profit on 93.0 billion won ($89.8 million) in sales revenue.

Hanwha opted to sell DreamPharma among some of its core assets “as part of its efforts to realign its business units and avoid a potential liquidity crisis,” the Korea Times reported today. Since early this year, according to the newspaper, the conglomerate’s Hanwha Chemical unit has actively sought potential buyers for the pharmaceutical business “because Hanwha believed the unit needed more long-term investment to generate profit.”

This spring, no fewer than eight bidders competed to acquire DreamPharma, The Korea Economic Daily reported on April 29, citing unnamed “investment banking sources.” Alvogen emerged as the buyer of choice for Dream last month, according to a July 4 item in DailyPharm, an online publication that covers the Korean pharmaceutical industry.

To generate liquidity, Hanwha Chemical issued 350 billion won ($337.9 million) in global depositary receipts in April. Hanwha has also sought to raise cash by selling its building materials business, Hanwha Engineering & Construction, to Morgan Stanley Private Equity in June, and by scaling back operations in its money-losing solar panel business, which has struggled to compete with stable oil prices and expansion by Chinese rivals.

Alvogen is acquiring DreamPharma through Asian subsidiaries that include Kunwha. The deal is subject to regulatory approval, with closing expected in the fourth quarter.

Headquartered in Pine Brook, NJ, Alvogen is an international privately-owned specialty pharmaceutical company focused on the development, manufacturing and marketing of generic pharmaceuticals, biosimilar products and OTCs. The company has commercial operations in over 30 countries with 2,400 employees.

Over the past year and a half, Alvogen has expanded in Asia-Pacific, growing to commercial operations operated through subsidiaries in 11 APAC countries—including China, Japan, Taiwan, Thailand, and Vietnam, in addition to South Korea.

In addition to Kunwha, Alvogen has acquired two other Asian drug companies—most recently in January of this year, when the company merged its Asian operations with those of the publicly-listed, Taiwan-based Lotus Pharmaceutical.

Alvogen is also active in central and eastern Europe, where in February, it launched a biosimilar version of Remicade™  (Infliximab), Johnson & Johnson’s blockbuster arthritis drug, marketed as Inflectra™ through its three-year-old partnership in those regions with Hospira. 

Previous articleCRISPRs Advance Gene Therapy for Beta-Thalassemia
Next articleAn Aspirin a Day Keeps Cancer Away