Wednesday, Oct 05, 2011


 
    (This story was originally published Tuesday) 
 
   By Sten Stovall 
   Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--Jordan-based Hikma Pharmaceuticals PLC (HIK.LN) says its acquisition of Morocco's ninth-largest pharmaceutical company provides "a missing link" to its home markets in the Middle East and North Africa and enables the expanding drug maker to focus on Turkey and the sub-Sahara to gain further scale.

Hikma late Monday said it bought 63.9% Morocco's Promopharm for $111.2 million and will launch a mandatory tender offer for the remainder.

Until now, Hikma wasn't in the Moroccan prescription drug market--the region's fourth-biggest in size--as local regulations require a manufacturing base. Morocco's market for pharmaceutical products was $1.7 billion last year. Promopharm had around 3.5% market share there, with annual sales of $45 million.

"Morocco is the fourth-largest market in the MENA area and we have been trying to enter it for a very long time," Said Darwazah, Hikma's chief executive, told Dow Jones Newswires. "With this, we will now be in every MENA market."

Promopharm's original management team will stay to help Hikma build its business in Morocco. "The chairman and CEO will remain in place. They are very well connected and respected there and have run the company for over 15 years now," Darwazah said.

Hikma's move into Morocco will be followed by other acquisitions next year.

"We will make some other small acquisitions in the New Year, and also put emphasis on acquiring something in Turkey, which is becoming a more dominant player in MENA," Darwazah said in an interview. Hikma is also looking to strengthen its position in Egypt and Sudan via acquisitions.

The MENA region currently generates around 60% of total revenue for the company that Darwazah's father founded in 1978 and which is now one of the region's biggest domestic pharmaceuticals companies.

But the London-listed company, which sells generic and branded drugs, is expanding its businesses in the U.S. and Europe. In May, the company acquired U.S. firm Baxter International Inc.'s (BAX) injectable generic-drug business, reflecting Darwazah's aim of reducing risk through geographic diversification.

That strategy which should bring the percentage of Hikma's sales generated in the MENA region down to 50% in around three years, Darwazah said.

-By Sten Stovall, Dow Jones Newswires; +44 207 842 9292; sten.stovall@dowjones.com

(END) Dow Jones Newswires

05-10-11 0530GMT