Lotus announced today that its acquisition of Dream Pharma (“Dream”) in South Korea has been completed. Dream was acquired through Lotus’s subsidiary, Kunwha Pharmaceuticals (“Kunwha”), in Korea and the combination will create one of the largest generic pharmaceutical companies in South Korea. The transaction represents a significant milestone in Lotus’s stated ambition to become one of the top five regional players in the APAC market.
The acquisition of Dream will significantly strengthen Lotus’s existing business in South Korea, adding a complementary portfolio of over 100 products. Dream currently has an impressive 35% market share in obesity products in Korea, with no overlap with Kunwha’s current portfolio in the market. The consolidated business creates a strong platform for exports and a basis upon which to introduce the Korean portfolio into other APAC markets.
The transaction will create a strong platform from which Lotus can drive revenue and profit growth across the region. APAC is one of the fastest-growing regions globally for generic pharmaceuticals. The market remains very fragmented, which provides an excellent opportunity for Lotus to play a leading role in further industry consolidation, with a focus on building a selective, high quality product portfolio in markets such as Korea, Taiwan, China, and Japan.
Market backdrop
The APAC regional pharmaceutical market is currently valued at around US$ 84 billion and is expected to grow by about 16% a year over the coming years. Regional markets are still very fragmented with very few regional or global players with a foothold. South Korea is a region with strong fundamentals, including rising domestic GDP, an ageing population and a growing export market. South Korea is one of the fastest growing developed markets for medicines in the world, delivering a growth of over 6% a year since 2010.
The consolidated business of Kunwha Pharmaceuticals and Dream Pharma creates one of the largest generic pharmaceutical businesses in Korea.