Inovax postpones PT Ponco purchase

Inovax postpones PT Ponco purchase

PERTH (Reuters): Australian drug developer and distributor Inovax Ltd said it would postpone the purchase of Indonesian drug maker PT Ponco for A$94.6 million due to Southeast Asia's economic turmoil.

"Due to the recent volatility in economic conditions in SE Asia and in particular the significant devaluation of the Indonesian rupiah, Inovax has decided to defer its proposed acquisition of the Indonesian pharmaceutical manufacturer PT Ponco which it announced on July 14, 1997," Inovax said.

Inovax said it remained committed to an expansion into drug making to complement distribution and product development.

But it believed that current economic conditions may now allow this to be achieved on more attractive terms.

"The present economic conditions in Indonesia, whilst difficult for many sectors of the economy have not had any major adverse impact on sales in our Indonesian operations during the past few months", Inovax chief executive officer Tony Fitzgerald said in a statement.

"Consumption of pharmaceuticals, particularly prescription drugs in an emerging market tends to be relatively immune to economic downturns and in Indonesia has demonstrated a consistently strong growth trend over the past decade," he said.

"Inovax believes these growth rates are likely to continue notwithstanding the present economic volatility," Fitzgerald added.

The proposed vendor of Ponco was the Saputra family, Inovax said in July.

Indonesia's Bakrie Group had been expected to help finance the acquisition and to gain majority control of Inovax once the deal was completed.