Matrix Laboratories Ltd and Aspen Pharmacare Holdings Ltd, South Africa, have entered into agreement for a long-term business relationship through the Joint Venture (JV) route.

As per the definitive agreements, Matrix 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 Ltd (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 the company on the closing date of the transaction i.e. January 01, 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, according to the company release.

As part of the agreement, the company will pick up a 50 per cent stake in Fine Chemical Corporation (FCC), South Africa, for an investment of US $ 20 million. 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 the Company and FCC.

The strategic relationship between the Company and Aspen assumes significance in view of the huge business opportunity in the treatment of HIV / AIDS patients.

"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 N Prasad, the Executive Chairman of the Company and Stephen Saad, the Group Chief Executive Officer (CEO) Aspen, in a joint statement.