A Czech pharmaceutical company has succeeded in attracting an investor despite world financial crisis which has been hampering most business.
The Japanese company Foji Capital has bought 49.8% of I.Q.A. shares. It also pledged to finance other projects of this developmental laboratory. Foji Capital will thus spend tens of millions of dollars in the Czech Republic altogether.
Twenty million for projects
I.Q.A. develops pharmaceutical products for the treatment of cancer or HIV, but it also owns a patent on dexibuprofen, which releases the effective substance much faster than its ordinary version.
“We can sell our patent in the form of licences, but we are considering our own production,” Xenie Svobodová, I.Q.A. board chairwoman, says by way of explanation as to why the company needed an investor. She says only three companies in the world produce a similar drug.
The price which Foji paid to become a shareholder in I.Q.A. has not been published. According to the estimates of Redbaenk, experts who specialise in mergers and acquisitions, it might hover around USD 10 million.
Further expenses will be much higher. “Small projects are of no interest to the Japanese since the costs of a business trip of one of the managers reaches hundreds of thousands,” says Richard Kovář from Redbaenk company.
I.Q.A. believes Foji will also bring in financial resources necessary for other projects “The new goal of the company is to further develop ongoing projects, which are worth up to USD 20 million. Investments into patent protection abroad, particularly in the US, amounting to USD 5-20 million are also a priority,” Svobodová says.
I.Q.A., which employs 40 people and 20 external consultants, has an annual turnover of some CZK 40 million.
I.Q.A. is an example of yet another pharmaceutical company which has chosen to rely on foreign capital recently. Tambdu from Olomouc, a producer and distributor of pharmaceuticals, was bought by Belgian company Arseus, while the Prague-based Interpharma was acquired by Otsuka, another Japanese firm.
Only a minority of pharmaceutical companies now remains in Czech hands. These include Herbacos-Bofarma, Bioveta and intravenous therapy solutions producer Ardeapharma.
Number of sales is dropping
I.Q.A. managed to get an investor in time when the world financial crisis blocked many of the prepared transactions.
“The whole process of choosing the investor started in the spring, but the truth is that in the past weeks some of the agreed mergers in our sector have been stopped,” Svobodová says.
The number of sold companies, as well as the sums paid by their new owners around the world have been decreasing since the last quarter of last year.
International analyst company, Dealogic, says the value of these transactions reflects the sharp decrease of interest in buying companies.
While the sum of all completed mergers and acquisitions until the middle of this year was USD 2.7 trillion (approximately 40-times the budget of the Czech Republic), it was USD 3.6 trillion in the same period last year.