Litha takes aim with vaccines

2010-05-18 07:26

Johannesburg – Litha Healthcare Holdings [JSE:LHG], originally a medical and equipment distributor, is on course to establish itself as a manufacturer of children’s vaccines and pharmaceuticals.

"By 2013 we’ll be manufacturing the vaccines from our Cape Town factory, which is in the process of getting MCC (Medicines Control Council) accreditation," said Litha Healthcare chief executive Selwyn Kahanovitz. Currently the group imports and distributes three child vaccines under licence for pharmaceutical multinationals GlaxoSmithKline and Sanofi. The government healthcare service is Litha’s primary client.

"We are in the process of technology transfers from the multinationals and we will produce the original patented vaccines," said Kahanovitz.

Litha Healthcare, formerly AltX-listed Myriad Medical, moved to the JSE’s main board following a takeover of the larger Litha Healthcare Group and the departure of Myriad founders Jack and Reuben Shapiro.

From the duo of the Shapiro brothers, Kahanovitz and his brother Martin took over as chief executive and chief financial officer early this year after the reverse acquisition.

Instead of changing course, Kahanovitz said the enlarged group will still trade in medical equipment distribution as before but would put more focus on the vaccines and pharmaceuticals side. "The Litha deal brings scale to the business in everything we do," said Kahanovitz.

Although Myriad only had a R340m turnover in the year ended September, its profit was in line with that of Litha Healthcare, which has a turnover of R640m.

"Margins for the group will start increasing with the inclusion of the new part into the group’s financials," said Kahanovitz.

A major activity of Kahanovitz’s new management team will be driving the company’s acquisition strategy. “There are opportunities for consolidation in the local market and the company’s gearing is quite low,” said Kahanovitz. He sees opportunity to use a combination of debt and script to drive acquisitions.

According to Kahanovitz opportunities for his company currently lie in the unlisted, smaller pharmaceutical companies as there is not much on the JSE that can be bought.

In thin trading on Monday, Litha closed unchanged at 120c/share. Its largest shareholders are Blackstar Fund Managers and the Kahanovitz brothers.