Adcock Ingram in series of takeovers

Durban - Adcock Ingram, the country's second-largest manufacturer of generic drugs, recently bought a 74 percent stake in The Scientific Group, shortly after purchasing Donmed Pharmaceuticals.

While Adcock Ingram's critical care division is established in both the public and private hospital market, The Scientific Group is established in public and private laboratories. Both firms supply hospital equipment, imaging and biotechnology.

Adcock Ingram bought into The Scientific Group this month and simultaneously sold its diagnostics business Sterilabs to The Scientific Group. Adcock Ingram critical care managing executive Arthur Barnett said the remaining 26 percent shareholding in The Scientific Group would be held by Brimstone Investments, the original owners.

"The shareholding by Brimstone gives us an empowerment vehicle for our products," he said. Barnett said Sterilabs had been sold to The Scientific Group to create a single business unit focusing on the hospital, laboratory and diagnostic markets.

Mel Davies, the executive vice-chairman of The Scientific Group, said the company carried more than 22 years of experience in the sub-Saharan market.

Adcock Ingram's pharmaceutical managing director, Jonathan Louw, said yesterday that the purchase amounts for Donmed Pharmaceuticals and The Scientific Group were still confidential.

The purchase of Donmed Pharmaceuticals was effective from August 1 and gives Adcock Ingram exclusive marketing and distribution rights for the Organon range of products.

The deal brings on board antidepressants including Remeron and hormone replacement therapy medication such as Livifem and Pregnyl. Other products under Donmed Pharmaceuticals include the contraceptive Marvelon.

"Besides an exclusive distribution agreement and licence, we will have automatic access to Organon's new product pipeline," said Louw.

In the last financial year, Adcock Ingram, the healthcare arm of listed Tiger Brands, contributed 48 percent of the group's operating income of R1.9 billion. Consumer healthcare showed an operating income of R263.8 million, regulated healthcare provided an operating income of R467.1 million and the operating income from hospital products was R209.6 million, adding up to a total contribution of R940.5 million to Tiger Brands' bottom line.

Adcock Ingram houses key brands such as Panado, Corenza C, Myprodol and Bioplus, and has four manufacturing facilities.

Tiger Brands fell 2.28 percent to close at R134.51 yesterday. The food producers and processors sector fell 1.17 percent.