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Watson to sell ScinoPharm share to Uni-President

By Gareth Macdonald, 02-Mar-2010

Related topics: Excipients, raw materials and intermediates, APIs (active pharmaceutical ingredients), Ingredients

A significant share of contract API maker ScinoPharm Taiwan is set to change hands after Watson Pharmaceuticals decided to sell its stake to Uni-President Enterprises Corporation.

New Jersey, US based generics manufacturer Watson invested $15.3m in ScinoPharm in 2004 to expand its access to the specialist active pharmaceutical ingredients (API) the Taiwanese produces.

Over the next few years Watson gradually increased its shareholding, spending $19.4m in 2005 and a further $12m the following year until it owned just under a third, 31 per cent, of the API maker.

However, according to CEO Paul Bisaro, while the investment strategy has been effective in securing API supplies, Watson has now increased in-house capabilities to a point where the deal with ScinoPharm is no longer the best option for “long-term growth.”

Watson predicted that the divestiture, which is subject to Taiwanese government approval, will generate net proceeds of approximately $94.0 million and said that the deal will close later this year.

Taiwanese food conglomerate Uni-President Enterprises Corporation already owns a substantial share of ScinoPharm and was a significant investor in ScinoPharm when the company was set up in the late 90s.

Capacity expansion

Watson's capacity expansion began in 2004 when it purchased a pharmaceutical manufacturing plant in Goa, India from Dr Reddy's Laboratories.

The following year the US non-branded drugmaker acquired Indian contract manufacturing organisation (CMO) Sekhsaria Chemicals, in a move specifically focused on adding API production capacity.

And, late last year, Watson further expanded capacity with the purchase of fellow non-branded drugmaker Arrow Group . This deal also gave the firm a 35 per cent stake in UK contract biologics maker Eden Biodesign.