Thailand’s PTT invests $50 mil. in Taiwan’s Lotus for SE Asian pharma growth
By Gloria Cho
TAIPEI, NNA - Innobic (Asia) will invest $50 million for a 6.7 percent stake in Taiwan's Lotus Pharmaceutical Co. to forge a partnership to target the fast-growing Southeast Asian pharmacy market.
Innobic, a wholly owned subsidiary of Thailand's state-owned oil and gas company PTT, will buy over 17 million newly issued Lotus shares at $2.87 each.
Expected to be completed by this week, the transaction will be done through Innobic LL Holding Co., which was established recently under Innobic (Asia) to operate as the pharmaceutical and life science arm of PTT, Lotus said in a statement on April 19.
The ASEAN bloc of 10-member countries is one of the fastest-growing pharmaceutical markets in the world.
Its pharmaceutical manufacturing industry will grow by 12.8 percent annually with a total addressable market cap of $148.3 billion over 2021-2027, driven by increasing prevalence of chronic ailments, growing geriatric population, high investment in research and development, and increasing per capita healthcare expenditure amid the COVID-19 pandemic, according to market research firm Kenneth Research.
Lotus will bring to its alliance with PTT its wide-ranging portfolio and strong pipeline in the region, R&D capabilities, pharma industry knowledge, supply chain and manufacturing as well as its global network of partners.
On the other hand, Innobic and PTT will complement its partner with its solid market access, local knowledge and potential commercial network, said the statement when highlighting their multifarious strengths.
"Both parties are committed to further collaboration to provide patients better access to high quality medicines across the region," said the statement.
Lotus CEO Petar Vazharov said the company has been actively expanding its Asian business from its traditional stronghold in Northeast Asia to Southeast Asia since early 2020.
Last year, it consolidated its Southeast Asia businesses and product portfolio of Alvogen as it established footprints in Thailand, Hong Kong, Singapore and Vietnam.
He said, "We believe Southeast Asia is a very attractive region due to a higher growth outlook and is far less crowded compared to, for example, China. Thailand, as an example, is the 5th largest pharmaceutical market in Asia, after China, Japan, India and South Korea. However, without a solid local partner, market access is extremely challenging. PTT Group shares the same strategic vision as Lotus. Jointly we are looking forward to building a stronghold in Thailand and beyond, similar to what we have done in Taiwan and South Korea.”
Buranin Rattanasombat, senior executive vice president of downstream business group alignment of PTT and chairman of Innobic (Asia), said the PTT Group has continuously expanded its business value-chain to cater to the changing demands of a diversified and broader customer base.
"With the rising concern on the importance of the healthcare eco-system, it has become a part of our Innobic (Asia) strategy to promote innovative medicines in Thailand and Southeast Asia to improve patient’s access to more affordable medicines with quality," he said.
A Lotus spokeswoman told NNA that the partnership's initial key focus would be oncology.
In the first quarter of this year, Lotus's revenue soared 63.4 percent to NT$3.3 billion compared to a year ago. This was driven by increasing sales of its cancer-related pain medicine which generated NT$1.2 billion, according to Lotus.
According to The Cancer Atlas, Lung, breast, and colorectal cancers are common in South, East and Southeast Asia, in addition to liver and stomach cancers, which are associated with infection.
Founded in 1966, Lotus is the largest pharmaceutical manufacturer in Taiwan by revenue today. It became a subsidiary of Alvogen Group which acquired 67 percent stake in Lotus in 2014.
With R&D and manufacturing platforms in Taiwan and South Korea, its wide portfolio covers generic drugs for fields such as oncology, cardiology, nephrology and central nervous system disorders. Lotus has operations in Thailand, Vietnam, China, India, and Singapore too.
PTT, which also has retail and F & B businesses, is the largest public-listed conglomerate in Thailand which is majority owned by the Ministry of Finance Thailand. It is the only company from Thailand listed in Fortune Global 500.