Stephen Saad, the founder and CEO of Aspen, runs the biggest pharmaceutical company in South Africa. It has a market cap of R108 billion and has 70 established business operations in 55 countries.

The man behind the business, Stephen Saad, had extensive exposure to the pharmaceutical industry before Aspen started operating.

Saad was born in June 1964 and raised in Durban. He attended Durban High School and later the University of KwaZulu-Natal.

He earned a Bachelor of Commerce degree in 1985 and a Postgraduate Diploma in Accounting in 1986. He went on to qualify as a Chartered Accountant (CA SA).

Saad started his career at Coopers & Lybrand, where he completed his articles. Here, he met his future business partner, Gus Attridge, his senior at the company.

Struck with the entrepreneurial itch, Saad left the business and joined Quickmed, a prescription drug distribution company.

“We sold to markets and to people that other companies ignored,” Saad told Forbes Africa. “Not many whites had ever been to a township, let alone done business there. But this was where the huge potential was.”

“I was a rep in the townships, and I learned a lot of life lessons in those days. My future thinking was modelled in those early days.”

This experience in pharmaceuticals taught him a vital lesson: people don’t want to compromise when it comes to their health, but the cost of medicine is also crucial.

He convinced Quickmed, which wanted to sell off the business, that ownership of intellectual property would be the only way to both save and grow the business.

He became a 50% shareholder and identified Covan, a family-run business that manufactured eye drops, as an acquisition opportunity.

Quickmed merged with Covan, forming a new entity, Zurich, doubling its turnover as a result.

In 1993, Prempharm (now Adcock Ingram) saw the threat that Zurich posed and acquired the company for R75 million.

This deal, which came with a restraint of trade conditions, made Saad a millionaire at age 29 when he sold his shares for R20 million. With his pockets lined, Saad approached Attridge with a lucrative business idea.

“That’s where my business partnership with Saad began,” Attridge told Forbes Africa.

The pair acquired Varsity College for R1.5 million, which had been poorly run and without financing, and faced closure within six months.

They restructured the overhead base, dismissed the founder and drove the turnover with a concerted advertising campaign.

“We embarked on quite a differentiated, let’s call it, advertising campaign where essentially we guaranteed students who attended all their lectures and did all their assignments that we would give them their tuition fees free the next year if they failed under those circumstances,” Attridge said.

“It was all built around adverts that went into the press which were around the F-word. It was F***, failing, but it provoked some reaction generally as well because it was a bit provocative, I suppose.”

Their plan worked and in 1996 they sold the Varsity College for R100 million.

Aspen

Aspen

In 1997, Saad and Attridge co-founded Aspen Pharmacare, starting as a small business in an old Victorian house in Durban.

“It was so obvious that there was a market out there that was hungry for high quality but affordable products and that needed representation,” Saad said.

“Although this knowledge had been acquired through the little sphere of doctors that I serviced, I was convinced it could be applied on a bigger platform—even globally.”

In its first year, Aspen recorded R105 million in revenue by buying licenses for non-core brands from large multinationals. This strategy introduced new products to the market, which big players were happy to offload to them.

Aspen also started owning intellectual property like patents and trademarks without the high costs and complications of manufacturing.

Three years into the pharmaceuticals business, Aspen took a big risk with a highly leveraged hostile takeover of South Africa’s oldest pharmaceutical company, South African Druggist (SAD), for R2.4 billion.

“That changed our business forever and changed our business model,” Attridge said.

Initially, Aspen wanted to avoid manufacturing and focused on high-margin products, but the acquisition of SAD, which was involved in pharmaceutical development and marketing, shifted their strategy.

Despite challenges, including opposition from SAD management and the inability to conduct due diligence, Aspen succeeded with financial backing from property entrepreneur Jonathan Beare and Investec’s Stephen Koseff.

With the deal done, the business grew to a $11.8 billion global corporation with Saad as the chief executive and Attridge as the deputy.

Despite being a newer player in the market, Aspen prospered while other more established companies, like Fedsure and Macmed, didn’t survive.

Since then, the company has experienced extraordinary growth, furthered by strategic agreements and market penetration.

Today, Aspen is the largest manufacturer of generic medicines in the southern hemisphere, supplying generic medicines to over 150 countries.

It is the first company on the continent to launch a generic anti-retroviral for the treatment of HIV and AIDS patients, thus becoming the largest supplier.

Saad has received numerous awards, including the Entrepreneur of the Year award at the All Africa Business Leaders Awards gala in 2016.

He emphasised the importance of focus, discipline, and balance in life. He has driven Aspen’s Corporate Social Investment initiatives, raising over R10 million for pediatric healthcare in Africa by cycling 240km off-road in one day.

His achievements have positioned Aspen as a global leader in the pharmaceutical industry and a key player in improving healthcare in South Africa and beyond.

“We were told that we were mad to manufacture in South Africa. Some analysts asked me if I was doing this for my own ego. I pointed out as politely as possible that I was a shareholder and that it was the right thing to do,” Saad said.

“Today, I’m so proud to be able to have proved the doomsayers wrong. Today, the billions of rands we invested in the Eastern Cape have produced one of the most competitive facilities in the world, and we send products of incredible quality to over 100 countries. It’s up there with the very best.”

SOURCE:The man who built a R108 billion pharmaceutical company in South Africa – Daily Investor