Gedeon (37 150 HUF, 1,07%) announced it established a joint venture with Helm AG on the acquisition of Strathmann Biotec GmbH & Co. KG, a subsidiary of the German Strathmann. The agreement is subject to approval by the German Competition Authority and the (54 EUR, 0,30%) value of the deal is EUR 22.9m. The new joint venture company will be owned 70% by (37 150 HUF, 1,07%), 30% by Helm comprises a state-of the-art biotechnology plant for the bacterial type of biotechnology together with R & D laboratory and pilot plant capacity in Hamburg. Biotech drugs are made from living organisms when compared to chemically synthesised pharmaceutical drugs. The company employs 81 staff.
Our view: We believe the news could have a slight positive impact as with this step the company further strengthens its defensive profile. So far their focus on the gynaecology therapeutic area provided shelter for margins from accelerating generic competition, but on the mid-term the niche bacterial biotechnology segment could also attribute to this strategy. A major risk factor for the biotechnology products is the still formulating legislative environment. As per the size of the transaction, it is rather a small deal, although we expect the deal to also enhance somewhat the capital structure of the company.