Arrow Pharmaceuticals and Apotex Australia propose merger

Arrow Pharmaceuticals and Apotex Australia have announced a proposed merger of their Australian and New Zealand generic pharmaceutical and over-the-counter (OTC) operations.

Arrow Pharmaceuticals is the Australian operating business of Strides, held through Singapore, and markets a broad range of more than 180 generic pharmaceutical products and pharmacy-only OTC products to pharmacies Australia wide. Apotex Australia is meanwhile an affiliate of Apotex, headquartered in Canada, and a leading supplier of generic pharmaceuticals, OTC products and vitamins to the Australian pharmacy market.

The combined operation is expected to become one of Australia’s leading pharmaceutical companies, seeking to create a sustainable platform for future growth and development of the companies’ business interests in Australia and New Zealand. The merged company will aim to:

• provide improved sustainability of low-cost generic pharmaceutical supplies to Australian pharmacies and the Pharmaceutical Benefits Scheme (PBS);
• expand and diversify each company’s current product portfolios through investment in complex products in key therapeutic areas of growth for pharmacy and expansion of their respective retail pharmacy product ranges;
• increase customer engagement through investment in professional programs, training and services, enabling pharmacists to gain access to additional revenue streams;
• leverage operating costs and operational synergies to build economies of scale.
   

It is expected that current Arrow Pharmaceuticals Executive Chairman Dennis Bastas will be appointed executive chairman of the new company. Apotex Managing Director, Asia Pacific Roger Millichamp will assume the role of CEO.

“The proposed merger will provide our Australian customers with unparalleled service and support from the businesses with which they have chosen to partner for over 15 years,” Bastas said.

“Once complete, our merged operation will continue to provide all of the Arrow and Apotex brands that our customers have come to know and trust, and further enhance our customer service and continuity of supply, to better help pharmacists grow their businesses.”

Both companies are currently in a strong commercial position, but will be better positioned to meet the future challenges of the pharmaceutical industry following the merger, which is still subject to regulatory approval,” Millichamp added.

“The proposed merger will take the best of both companies, optimise our shared cost base and maintain the viability of our operations through more effective delivery of essential medicines and services to consumers and patients.

“Importantly, the proposed merger will also provide Australian pharmacists, their patients and consumers alike with ongoing access to a diverse range of almost 500 low-cost medicines, and permit the expansion of our current product ranges, including OTC, vitamins and practitioner-only products.”

The proposed merger is still subject to several conditions, including ACCC approval and due diligence, but is anticipated for completion in the new financial year. Apotex will retain separate ownership of a hospital services business with a portfolio of injectable, sterile and oncology products marketed in both Australia and New Zealand.

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