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Big Pharma’s Generics Push Continues With Sanofi Deal

http://blogs.wsj.com/health/2009/04/09/big-pharmas-global-generics-push-continues-with-sanofi-deal/

›April 9, 2009, 8:45 AM ET
By Jacob Goldstein

Quick, who’s the biggest generics manufacturer in Latin America? Those who guessed generics giants like Teva or Mylan, thanks for playing. The answer is Sanofi-Aventis, a Big Pharma shop not typically lumped among the generics crowd.

Sanofi said today that it’s paying €500 million (about $660 million) for Medley, a family-owned drug manufacturer in Brazil. [The $600M deal price includes the assumption of debt.] The acquisition will make Sanofi Latin America’s biggest generics manufacturer, Dow Jones Newswires reports.

As growth has slowed for Big Pharma’s traditional cash cows — blockbuster drugs sold in rich countries — the industry has increasingly looked to middle-income countries and off-patent drugs.

The Medley deal comes just a week after Sanofi said it bought Mexico’s Laboratorios Kendrick for an undisclosed sum. [Kendrick is tiny compared to Medley, however.] And last year, the company paid $2 billion for the shares outstanding of Czech company Zentiva, a bet on both Eastern Europe and the generics business.

Some of Sanofi’s long-time competitors are making similar moves. Pfizer last year created an “established products” unit to focus on global sales of off-patent drugs, and last month announced a deal with India’s Aurobindo Pharma to expand its line of generics.

GlaxoSmithKline made a deal last year with South Africa’s Aspen to sell off-patent drugs in the developing world. And, through its Sandoz unit, Novartis is an old hand in the generics business.‹