Some medicines are worth more to someone else's sales team. Aspen Pharmacare has agreed to sell the European rights to Ovestin, a cream and capsule used for vaginal symptoms of menopause, to Ennogen Healthcare International, a privately owned drug company run from Dubai. The price is €197 million, plus about €4 million for the stock already made.
The deal separates selling Ovestin from making it. What Ennogen gets is the right to sell the brand: its intellectual property, its product registrations and marketing approvals across 40 European territories, and the inventory. No staff move across. The making stays with Aspen, which will supply both the active ingredient and the finished cream under agreements that run ten years to start and can be extended. Ovestin is made at Aspen's plant in Bad Oldesloe in Germany, where the company said in 2024 it was adding capacity because European demand had soared and several countries had run short.
How R756 million of sales becomes a R2 billion profit
The size of the profit has little to do with how much Ovestin sells. In Aspen's year to June the European business brought in R756 million of revenue, a small slice of the group, and R238 million of profit after tax. What decides the gain is the gap between the price and the value the assets carried in Aspen's books, about R1.6 billion. Converted at June's exchange rate, that gap comes to roughly R2 billion.
Aspen also gets paid to help with the handover. For five years Ennogen pays €1 million a month for strategic services to bed the brand in, and for up to three years Aspen will distribute it for a fee of 4% of sales while the licences move across.
Buybacks first
Aspen frames the sale as part of a stated aim to unlock what its parts are worth separately, and calls the price a strong multiple for an asset outside its focus on emerging markets. The cash will follow its capital-allocation model, it says, with share buybacks still the preferred way of returning money to shareholders, a buyback being the company buying its own shares so fewer remain in issue.
Investors approved. The shares rose just over 2% on Monday, taking their gain over the past year to almost two-thirds and the company's value to just under R70 billion.
Finance chief Sean Capazorio told News24 that Europe accounted for 70% of the drug's sales, and that Aspen will keep selling it elsewhere, including Latin America and Canada. Asked about more deals, he said none were in the pipeline, and that this one had come the same way as recent ones, from an approach. "This one again was also very opportunistic," he said, adding that the aim "is not to proactively go out and try and dispose of things".
None of it changes hands until Ennogen's own funding arrangements become unconditional. The full €197 million is due on the day they do.
