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Parke-Med purchase to accelerate growth at Adcock Ingram

Published May 21, 2003


Durban - Adcock Ingram, a Tiger Brands subsidiary, has made its third acquisition in the past 12 months in a bid to strengthen its market position in an industry that is coming under increasing price pressure.

Adcock Ingram said on Monday that it would buy Pfizer South Africa's generics business, Parke-Med, subject to approval by competition authorities.

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Nick Dennis, the chief executive of Tiger Brands, said: "The acquisition will complement Adcock Ingram's existing generics business and accelerate top-line growth in a fast-growing market."

Pfizer SA said the decision to sell Parke-Med was based on its global strategy of focusing on its core business of discovering, developing and marketing new medicines.

The sale includes registrations and trademarks for a line of generic pharmaceuticals including the flagship Zetomax and Zildem for cardiovascular treatment, Glucomed for diabetes and antidepressants.

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Mike Norris, the chief executive of Adcock Ingram, said the company was moving more into generics. This was the area that was showing the most rapid growth and the greatest opportunities.

In the six months to March the company brought two generics to the market - a short-acting sleeping pill and a drug to lower cholesterol.

Norris said: "Getting first to market generally means that you will have a larger market share in that generic, even when competitors enter the market."

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Eric Levine, an analyst at Investec Securities, said in light of the pricing pressures in the industry, the challenge for Adcock was to launch new products and the right products.

Following the Parke-Med acquisition the company would have a more balanced portfolio of drugs in the acute and chronic markets, he said.

The healthcare and pharmaceuticals businesses of Tiger Brands produced a mixed performance in the six months to March.

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Consumer healthcare increased operating income by 25 percent to R155 million on a 43 percent rise in revenue to R672 million.

This performance was bolstered by the acquisition of Robertsons Homecare and some brands from Abbott Laboratories.

The Robertsons Homecare acquisition included brands Doom, Fastkill and Airoma. The acquisition from Abbott Laboratories included brands Citro Soda and Vidaylin vitamins.

Excluding these acquisitions, consumer healthcare's operating income and revenue grew 4 percent and 13 percent, respectively.

But the regulated division did not perform as well. Operating income rose 5 percent to R219 million on a 17 percent gain in revenue to R631 million.

This was as a result of lower profits in the prescription medicines division, which was influenced by increasing margin pressure from healthcare funders.

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