VENTURES: Litha Gets Another Six Years
Recent Western Cape Business News
JSE listed health care group Litha, which operates a vaccine plant from Pinelands, has received a sizeable boost for its Cape-based business.
Last month Litha announced that its subsidiary, the Biovac Institute, had extended its Final Supply Agreement (FSA) with the Department of Health for another six years.
Last year in June CBN wrote that the sleepy suburb of Pinelands (well, now that Old Mutual has shifted its local HQ to Johannesburg) could host what could become a major player in the manufacturing of vaccines.
The extended FSA certainly means the fledgling Pinelands vaccines manufacturing plant – which only comes into full production in mid 2013 – has plenty of legs for sustained medium term growth.
The Biovac Institute is a public-private partnership set up in 2003 to secure a reliable supply of affordable, high quality vaccines.
The vaccines division already supplies between 50% to 60% of the public sector market. But this figure could increase markedly when Litha’s domestic vaccine formulation and filling really kicks off – especially if the Pinelands plant competes aggressively with multinational vaccine producers.
The value of the FSA was not disclosed, but CBN would imagine it’s a pretty lucrative extension.
The initial supply agreement entered into in 2003 enabled Litha to import and supply all paediatric vaccines to the South African Government until the end of 2010.
The FSA, which runs to the end of 2016, means Litha has the reassurance of continuing to supply paediatric vaccines to the SA government while the Pinelands plant is gearing up its local vaccine manufacturing capacity.
Litha CEO Selwyn Kahanowitz says the extension of the FSA is underpinned by the need to ensure the development of domestic capacity in vaccine production and to establish an economically viable vaccine producer.
He says the extension also recognises creating a competitive platform from which a domestic producer of human vaccines can compete in relation to other markets.
Perhaps more importantly, Kahanowitz stresses that any development in the local vaccines sector should open access to other markets as potential customers. For Litha to produce vaccines for sub-Saharan Africa countries and beyond would be an obvious (and profitable) strategy.
Perhaps significantly, only a day after announcing the FSA extension, Litha detailed a new business development agreement with CPOINT Capital, a Canadian-based company.
Kahanowitz says although the agreement initially focused on the sourcing and supply of generic products for Litha’s Pharma Division, CPOINT will also identify innovative and new technologies in healthcare for the medical and biotech division.
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