Chileans invest in Over-the-counter medication

Capital from Chile has acquired control of Ahimsa and Hexa Medinova. The aim is to form a new corporation which will lead in the 20% invoicing coming from prescription medication sales (sic), currently worth U$S180 millions.

An investment group led by Chilean businessman Alberto Eguiguren has taken majority control of the Ahimsa and Hexa Medinova pharmaceutical companies, and its objective is to control 20% of the local over-the-counter medicines market which is currently worth 180 million dollars in annual sales.

The new company hopes to export 30% of its production over the next five years, shipping to Ecuador, Venezuela, Guatemala, Bolivia, Peru, Uruguay, Paraguay, Colombia and Mexico. After these, to Europe.

Allende & Brea represented the purchaser in this simultaneous acquisition of two labs through Gustavo E. Garrido, Valeriano Guevara Lynch, Raul Granillo Ocampo, Mariana Eppenstein, Paula Azulay and Agustin Cases Bocci.

Ahimsa S.A. was represented by Fernando Madina and Martín Gaing while Laboratorios Hexa S.A. was advised by Aldo Jait.

The new unified company currently invoices U$S 30 millions annually. Although there will be a joint administration of the two companies, they will continue to operate independently.

This move is explained by the evolution of this market which, until a short time ago, was channeled through specialized health institutions. However, the Generic Medication Law was passed in 2002 and the business changed. Both Ahimsa and Hexa Medinova are young companies.

Gustavo Malvestiti, who was GM at Ahimsa, will occupy a similar post in the joint operation and Adrián Lamandía, who comes from Hexa Medinova, will be the Marketing Manager. The new arrangement has meant that four partners at Hexa Medinova will step aside: likewise, the Pagone family, who formerly ran Ahimsa.

The new owners declined to reveal the amount involved in the takeover, but they said the venture will not be renamed, in order to maintain the current line of products. Thus, the medicines from the two companies will continue to arrive at pharmacies under the current marketing procedures.

Alberto Eguiguren stated that "the Argentine pharmaceutical industry will be the base for the export project, which includes high technology procedures to produce high-quality medicines at low cost".

Sales in the domestic market will be 85% to pharmacies and 15% to clinics, sanatoriums and hospitals.

Ahimsa was founded in 1999, before over-the -counter products attracted the attention of investors, consumers and regulators. "We knew that sales of generic products would be strong in 2004 and 2005," says Malvestiti, former GM at Northia for 20 years, culminating in his decision to form his own company. Since then, turnover has increased: In 1999 Ahimsa invoiced one million dollars and in 2003, U$S 4.3 millions.

Hexa Medinova started up in 2001 with the merger of Hexa and Medinova. The manufacturing plant is in the Flores neighborhood (of Bs. Aires), which will continue to operate in tandem with the Ahimsa facility in La Plata. The two plants employ 250 workers and the companies will continue to strengthen their strategic partnerships with Laboratorios Maelor, The Himalayan Drug Company and Ciclones Pharmaceutical.