Innobic (Asia) Co., Ltd., a wholly-owned subsidiary and life science arm of the national oil and gas conglomerate PTT, together with Aztiq HK Ltd., is acting on its promise to uplift Thailand’s life science business by completing a deal to buy out Alvogen Emerging Markets Holdings Ltd. (AEMH), raising Innobic’s shareholding in Taiwan-based Lotus Pharmaceutical Co., Ltd. to 37% from 6.6%.
The share purchase transaction, worth US$475 million, was officially celebrated at Four Seasons Bangkok Hotel on 9 May 2022, making Innobic a major shareholder in Lotus Pharmaceutical. AEMH was previously the major shareholder in Lotus Pharmaceutical.
Headquartered in Taiwan, Lotus Pharmaceutical was established in 1966.
The company is a leading generic drug manufacturing company primarily manufacturing drugs covering nervous system disorders, cancers, diabetes, vascular diseases, heart disease and women’s health diseases.
“Investments in Lotus Pharmaceutical serves as a contributor to help Innobic gain access to both domestic and overseas pharmaceutical market, especially in ASEAN, as the Taiwan-based firm is a very important drug manufacturing base,” Dr. Buranin Rattanasombat, Senior Executive Vice President, Innovation and New Ventures, Innobic, said in an exclusive interview.
“Adalvo, a B2B leader with a network of over 60 countries and over 40 partners in pharmaceutical fields, has a strong advantage in terms of drug licensing. So this share purchase deal enables the company to leapfrog ahead as it strengthens its position in the pharmaceutical sector.”
Aztiq is a long-term investment fund based in Iceland, focused on real estate and pharmaceuticals as well as arts and culture.
“Thailand is already entering into an aging society,” continued Dr. Buranin. “The demand for quality and affordable drugs to cure non-communicable diseases is also rising. Collaboration with Aztiq helps us find better healthcare solutions for all Thais. They can have higher quality generic drugs at lower prices, thanks to Aztiq’s strong fundamental structure and connections in over 90 countries.”
“Currently, Thailand imports a lot of pharmaceutical products. We only manufacture about 30% of them domestically and mostly API (90% from 30%) used in drug manufacturing are imported. The other pharmaceutical products approximately 70% are imported. Investing in Lotus will help us shorten the time to expanding pharma businesses to commercial scale. The company can continue to act on its promise of pushing life science business, our New S-Curve business, to commercial scale.”
“Pharmaceuticals is entering a new era of innovative drugs. We aim to be a leader in these and to achieve this we are building a comprehensive pharmaceutical business ecosystem covering research and development, drug formula development, manufacturing and selling. We are showing that it is possible for Thai businesses to take advantage of the opportunities that exist to produce a variety of international standard drugs. Our initial focus is on producing high-quality but low-cost generic drugs for treating cancers and nervous system disorders.”
Robert Wessman, Chairman of Lotus Pharmaceutical and Founder of Aztiq, said: “Asia is still a fragmented pharmaceutical market, but full of growth opportunities, especially in ASEAN which has a total population of around 600 million people. The total pharmaceutical market in Asia is worth approximately 2.5 billion baht a year. In Thailand, the growth rate is 3%-5% per year. This makes investment in the region attractive. With this investment in Lotus, along with our pharma networks and drug factories worldwide, we can market generic drugs here cost-effectively.”
“Working with Innobic which has strong potential for pharmaceutical market expansion in ASEAN will push Lotus Pharmaceutical and Adalvo to be among the leaders in the industry at global scale.”
The new investment by Innobic follows the sale of 17.51 million newly issued Lotus Pharmaceutical shares to Innobic for NT$50 million. This accounts for 6.6% of total shares; enough to make Innobic the second-largest shareholder after Alvogen Group, an international pharmaceutical company.
Lotus Pharmaceutical became part of Alvogen in 2014. Among the important assets it owns are a research institute for product development and international-standard drug factories in Taiwan and Korea. Its pharmaceutical products are sold in key markets across the globe through a network or partners mostly comprising leading pharmaceutical companies.
“Forming alliances with leading global pharmaceutical firms is in line with Innobic’s strategy to strengthen Thailand’s health-related sectors, including medicines, healthy foods and medical technology,” added Dr. Buranin. “We also expect rapid growth of pharmaceutical business over the next decade.”