Africa's Biggest Drugmaker Pivots to Vaccine in Virus Response
Janice Kew, Bloomberg News
An employee walks down a corridor near pharmaceutical displays at the Aspen Pharmacare Holdings Ltd. offices in Durban, South Africa, on Friday, June 30, 2017. Aspen lost its appeal against a ruling by Italy's antitrust authority and will have to pay a 5.2 million euro ($5.9 million) fine and interest for raising prices on cancer drugs by as much as 1,500 percent. Photographer: Waldo Swiegers/Bloomberg , Bloomberg
(Bloomberg) -- Aspen Pharmacare Holdings Ltd.'s deal to make Covid-19 vaccines for Johnson & Johnson caps a broader effort by Africa's biggest drugmaker to adapt to the pandemic, having earlier re-purposed older medicines and deployed anesthetics to battle the virus.
The Durban, South Africa-based company has the rights to the corticosteroid dexamethasone, which was found in June to reduce the mortality of critically ill patients by as much as 33%. The pharma group also sells the anti-gout drug colchicine, which has been used to prevent respiratory distress arising from the coronavirus, and makes anticoagulants like fraxiparine that treats blood clots.
"In February, we looked at how we best respond to this looming disaster facing us and we split it into three buckets -- what we can do at a therapeutic level, what can we do at a vaccine level and what can we do to generally help society," Stavros Nicolaou, a senior Aspen executive, said in an interview. This has "positioned us globally as a company that had a multifaceted response to this pandemic."
Aspen's role as a local manufacturer of these treatments is a bonus for South Africa, as it eases the need to import medicines that are in high demand worldwide. While the country's pandemic peaked in July, two provinces have recently seen a notable up-tick in cases and some epidemiologists are forecasting a resurgence from January, albeit less severe than the first peak.
To be in a position to make the J&J vaccine, Aspen has invested about 3 billion rand ($191 million) in a plant in South Africa's coastal city of Port Elizabeth. The facility has the capacity to make as many as 300 million doses a year, enough to enable exports to the rest of the continent, which has fewer resources to produce an inoculation.
The pandemic itself has not all been good news for the drugmaker. Aspen withheld its annual dividend for a second consecutive year in September with demand for some of its products dropping as patients deferred elective surgery.
The company's regional brands portfolio, which includes a sleeping aid, an iron supplement and a pain killer, accounts for 44% of total revenue. This unit's income only rose 3% in the year through June as social-distancing measures impacted the demand for medicines used for communicable diseases not related to Covid-19.
Still, Aspen has taken steps to adapt and the shares are up slightly for the year as a whole.
"With a lot of these pandemics you land up re purposing older drugs because that's the ones you've got experience in. Some of them work out, others don't."