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Aspen sells part of a division

What happened with Aspen and Litha? You may have seen in the news that there was a deal of some sort, for 1.6 billion Rand. This was Aspen selling their injectables and established brands business unit to Endo, who own Litha. It looks like a decent price, this business that Apsen are selling for that 1.6 billion Rand price had revenues of 362 million Rand and pre-tax profits of 136 million Rand, as of June 30, 2014. At the same stage, group revenue was 29.5 billion Rand. As you can see, this was a little over one percent of group revenue, and an even smaller part of profits.

Byron sent an article through yesterday, Endo Pharmaceuticals Shells Out $130 Million for Nearly 70 Pipeline Programs From Aspen Pharmacare Holdings. I guess this is a chance now for Aspen to continue to focus on their newer therapies. The ones that Aspen are getting out of are pain and cardiovascular therapies, I am thinking the Mybulen and Pharmapress, perhaps Stilpane too.

Just for background knowledge, the overall South African business last year at June generated 7.4 billion Rand worth of revenue, an increase of only one percent on the prior year. The margins decreased. It is a good thing that they are selling businesses and paying down debt where needs be. Good work. We continue to recommend Aspen as a buy, this hardly moves the needle and of course strengthens their cash position.


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