By Michael Fitzhugh
Amgen (NASDAQ:AMGN) is expanding its access to Brazil's fast-growing pharmaceutical market with a $215 million acquisition of Bergamo, a privately held Brazilian pharma, and a tentative agreement to regain product rights now held by Hypermarcas. Amgen says the transactions will provide it with a significant presence in Brazil and immediate, direct access to one of the fastest growing pharmaceutical markets in the world.
Hypermarcas currently holds rights to the cancer therapeutic Vectibix and the hyperparathyroidism medication Mimpara, two Amgen medicines already approved for the Brazilian market. Amgen will also reacquire rights to romiplostim, a treatment not yet approved in Brazil for idiopathic thrombocytopenic purpura, a clotting disorder.
"Acquiring Bergamo, a profitable company with an established local infrastructure, and regaining the rights to our products in Brazil, provides us an attractive entry into the Brazilian market," says Amgen chairman and CEO Kevin Sharer.
Bergamo is a leading supplier of medicines to Brazil's hospitals and has manufacturing facilities in Sao Paulo state.
The acquisition of a company with a significant local presence in Brazil may also prove essential to Amgen's ultimate success in the country. The Brazilian market can prove difficult for U.S. companies to access, notes the United States Commercial Service. Brazil's federal government is the biggest buyers of goods and services, but winning contracts with the government can be challenging.
"U.S. exporters may find themselves at a competitive disadvantage without a significant in-country presence, as well as the patience and financial resources to respond to legal challenges and bureaucratic delays," the Commercial Service notes in its 2010 guide to doing business in Brazil.
Brazil is among the top ten pharmaceutical markets in the world and in recent years has been growing at a rate of about 12 percent per year, Amgen notes. It is expected to be the world's fifth largest pharmaceutical market by 2015. Amgen says its renewed efforts in Brazil are part of a wider international expansion strategy.