• Matrix to receive US $ 36 Million from transfer of assets, technology & IP in ARVs
• Indian JV to be named Astrix Laboratories Limited (Astrix)
• Astrix to be the lead supplier of ARV APIs to Aspen and to play a lead role in growing ARVs business
• Aspen to sell 50% stake in Fine Chemical Corporation (FCC), South Africa, to Matrix for US $ 20 Million
• Matrix to get access to Oncology, Controlled Substances and High Potency APIs of FCC
• FCC has 25 US DMFs and FDA-approved facility, no overlap with Matrix's products

Matrix Laboratories Limited, Hyderabad-India, and Aspen Pharmacare Holdings Limited, South Africa, today executed the definitive agreements for a long-term business relationship between the two companies through the Joint Venture (JV) route. The agreements are in line with the strategic understanding reached by both the companies earlier.

As per the definitive agreements, Matrix Laboratories will transfer one of its Active Pharmaceutical Ingredients (APIs) manufacturing facilities, technology and Intellectual Property (IP) related to the manufacture of certain APIs to Astrix Laboratories Limited (Astrix - an Indian joint venture company) for a total consideration of US $ 36 million. The said facility, located near Hyderabad, has been approved by the US FDA and the World Health Organization (WHO), Geneva. This amount of US $ 36 million is expected to be received by Matrix on the closing date of the transaction i.e., January 1st 2006. Aspen Pharmacare will pick up a 50 per cent stake in Astrix (the Indian joint venture company) for a consideration of US$ 36.5 million.

Astrix Laboratories Limited (Astrix - the Indian JV company), will be the lead supplier of Anti-retroviral (ARV) APIs to Aspen. The capacity from the said facility is adequate to meet the ARV-API demand for the next few years and the facility also offers scope for modular expansion to meet additional demand for APIs. Astrix will have the technology and expertise to manufacture the multiple synthesis complex ARV APIs and these will be further finished into Dosage forms in the facilities of Aspen in South Africa.

As part of the agreements, Matrix Laboratories will pick up a 50 per cent stake in Fine Chemical Corporation (FCC), South Africa, for an investment of US $ 20 million, which will be paid on the closing date i.e., January 1st 2006. FCC, which is currently 100 per cent owned by Aspen, has a US FDA - approved API manufacturing facility in Cape Town. With an expertise in handling Oncology, Controlled substances and High Potency APIs, it has so far filed 25 DMFs with the US-FDA. The turnover of the company for the year ended June 2005 was US $ 27 Million. FCC is a leading API manufacturer in South Africa and has a good customer base for its products in US, Europe and Africa. There is no overlap between the products of Matrix and FCC.

The strategic relationship between Matrix and Aspen assumes significance in view of the huge business opportunity in the treatment of HIV/AIDS patients. While more than 45 million people are estimated to be infected with HIV/AIDS, about 40 per cent of the world's infected population requiring ARV treatment is in Sub-Saharan Africa (SSA). Aspen has a strong presence in SSA.

Aspen has bagged the lion's share of the South African Government's 3-year tender finalized earlier this year for the treatment of HIV/AIDS in South Africa with 58% of the volumes awarded. Aspen has also received voluntary licenses from the innovator companies to manufacture certain generic ARVs and has subsequently launched different ARV products.

While it is estimated that only 12 per cent of the infected people requiring ARV treatment have access to medicines in the developing world, the situation has been improving gradually with the initiatives taken by various governments including the President Bush's US $15 billion PEPFAR (President's Emergency Plan for AIDS Relief), and also the initiatives of World Health Organisation (WHO) and the Clinton Foundation.

The US FDA's 2004 accreditation of Aspen's world class Oral Solid Dosage (OSD) facility and registration of its co-pack triple combination generic ARV treatment qualified Aspen as the first generic supplier under President Bush's Emergency Plan for AIDS relief (PEPFAR) programme to which funding of US$ 15 billion has been committed. Similarly, the Clinton Foundation's initiative to secure medicines at very affordable prices has been extended to 100 developing countries. Aspen and Matrix are beneficiaries of both these programmes.

Both Matrix and Aspen are eligible to supply ARVs under PEPFAR, WHO and Clinton Foundation sponsored projects. The ARVs business is expected to grow significantly as the number of HIV/AIDS infected people requiring ARV treatment is expected to increase over the years with the progression of the disease in the infected people, growing incidence of infection in countries like India, China and Russia, and with the increased funding support from various governmental and non-governmental agencies.

"The long-term strategic relationship between Matrix and Aspen is a great leap forward and will result in combining the strengths of both the companies to achieve global leadership position by meeting the large unmet needs in the treatment of HIV/AIDS. The JV relationship between both the companies will serve their customers better by ensuring high quality products and uninterrupted supply to meet the growing demands," said Mr. N. Prasad, the Executive Chairman of Matrix, and Mr. Stephen Saad, the Group Chief Executive Officer (CEO) of Aspen, in a joint statement.

"The FCC JV will offer the scope to build a new and robust API product pipeline for its US FDA approved manufacturing facility by leveraging Matrix's inherent capabilities in product development and cost effective manufacturing. With no overlap of products, this will have absolute synergy effects," they added.

About Matrix Laboratories:

Matrix Laboratories Limited is a public limited company listed on BSE and NSE, and is engaged in the manufacture of Active Pharmaceutical Ingredients (APIs) and Solid Oral Dosage Forms. Matrix is one of the fastest growing API manufacturers in India and focuses on regulated markets such as US and EU. The company has a wide range of products in CNS, anti-bacterial, anti-AIDS, anti-asthmatic, cardiovascular, gastro intestinal, anti-fungal, pain management and life style related therapeutic segments. Four manufacturing facilities of the company are approved by the US FDA. The combined FDA approved capacity is one of the largest in the country. The company's Finished Dosage Forms (FDF) manufacturing facility has a capacity to manufacture 2 billion tablets, 300 million capsules on two- shift basis.

With about 2000 employees, including 280 R&D scientists, Matrix focuses on developing APIs with non-infringing processes to associate with generic players in regulated markets for their early formulation entry.

Matrix reported a profit after tax (PAT) of US $ 30 million on sales of US $ 146 million for the financial year ended March 31, 2005. It has recently acquired controlling stake in Docpharma, Belgium, for a front-end presence in Southern Europe. Newbridge Capital, US, and Temasek Holdings, Singapore, are the strategic investors in Matrix with combined holding of about 40%.

About Aspen Pharmacare:

Aspen Pharmacare is Africa's largest pharmaceutical manufacturer and a major supplier of branded and generic pharmaceutical products to the southern African and selected international markets. It has a total group turnover of US $ 461 million and net profit of US $ 79 million for the year ended June 2005. Aspen is listed on JSE Limited in South Africa and has a present market capitalization exceeding US $ 2 billion.

Aspen's Oral Solid Dosage (OSD) facility was the world's first generics manufacturing facility to receive FDA tentative approval for the supply of generic triple combination ARV therapy to the PEPFAR programme. Aspen pioneered the formulation and development of generic ARVs under voluntary licences from the innovator companies and subsequently launched different ARV products. In 2003, Aspen was selected as one of only three ARV manufacturers worldwide recognised by the Clinton Foundation initiative for combating HIV/AIDS.

Aspen's strong business foundation in South Africa provides the launching pad for its global expansion. The Aspen group has made strategic investments in the United Kingdom and Australia in line with its plan to harness synergies internationally.