* Ex-Actavis CEO Wessman named executive chairman of Alvogen
* Takes 30 pct stake in firm, option to buy another 10 pct
* Aims to build a top-10 generics player in five years
* Focus on complex products, emerging markets, few plants
* Plans roughly $70 mln R&D spend in next two years
By Quentin Webb
LONDON, July 29 (Reuters) - Icelandic pharmaceutical entrepreneur Robert Wessman is staging a comeback in the generic drugs business, taking a 30 percent stake and the role of executive chairman at privately held U.S. firm Alvogen Group.
The move comes a year after Wessman stepped down as chief executive officer (CEO) of Actavis, the firm he pieced together into one of the world’s biggest copycat drugmakers through a string of more than two dozen acquisitions.
Wessman, once dubbed the “Viking boss” by the Economist, told Reuters he now aims to make Alvogen one of the world’s ten biggest generic drug makers by revenues in five years.
Financial terms of the investment were not disclosed but Wessman said Alvogen plans to spend about $70 million on research and development (R&D) in the next two years.
Wessman surpasses former chairman Ghiath Sukhtian, who remains on Alvogen’s board, as Alvogen’s biggest investor, while private equity firm AFI Partners also holds a stake.
Alvogen will target harder-to-replicate products where competition is less intense, and will seek opportunities in promising markets such as China, Vietnam, Brazil, Mexico, the Middle East, and Eastern Europe.
“The end goal is to build a global player which has an extra edge in the portfolio, which has an extra edge by putting effort into higher-growing markets ... and the key is also to have cost-efficient manufacturing,” Wessman said in a telephone interview.
Alvogen has a pipeline of 40 complex generics, including solid dose, controlled release and transdermal patch products.
It will focus production on as few sites as possible, using a 375,000-square-foot plant in New York state owned by affiliate Norwich Pharmaceuticals, and a plant it is buying in India.
GLOBAL REACH REQUIRED
The new role reunites Wessman, who has an option to increase his stake to 40 percent, with former Actavis mergers and acquisitions (M&A) Vice President Doug Drysdale, who is Alvogen’s CEO.
Wessman said Alvogen aims to grow both through acquisitions and “greenfield” investments overseas, but it was likely to be less acquisitive than Actavis.
He holds a roughly 10 percent stake in Actavis, following its 2007 leveraged buyout by tycoon Bjorgolfur Thor Bjorgolfsson. Bjorgolfsson attempted, and then postponed, a sale of the debt-laden firm earlier this year. [ID:nLG141366]
Wessman forecast further consolidation among generic drug makers, the biggest of which is Israel's Teva TEVA.TATEVA.O, as companies sought global scale to make production and research & development more cost-efficient.
In the medium term, he said: “I only see a handful of large players. You need to have a global reach to be competitive.”