Pharmaceutical Company Bets On Hotel And Casino Project To Diversify Portfolio, Boost Revenue
Drugmaker Easton Pharmaceuticals has placed a second bet on the commercial real estate hospitality and gaming sector.
The company is diversifying its portfolio by investing in lucrative assets within various growing industries. This week it grabbed a stake in a 538-room hotel and casino project under development in Europe. The project is expected to generate €77M ($89.7M) on an annual basis.
The project will include five restaurants, a convention center, a shopping center and nightclub, a spa, 1,000 slot machines, 50 gambling tables and a covered parking garage than can house more than 500 vehicles.
“We’ve been looking to reposition the company in more lucrative segments,” Easton CEO Evan Karras said. “My background prior to Easton was real estate, and I was involved in gaming internationally. We determined part of our strategic growth plan is to expand into real estate, hospitality and shipping as well.”
Karras did not disclose additional details about the size or value of the stake Easton acquired in the European project, nor information about the developer, hotel operator or location of the project. Negotiations for the project are still underway and are expected to be completed within the next 30 days.
This is the second investment of its kind. Earlier this month, Easton announced it inked a deal taking a stake in a 270-unit hotel and casino in Greece that generates about €60M ($70M) a year.
Formerly a wound-healing medical drugmaker, Easton now focuses on medications to treat cancer, bacterial and yeast infections and other therapeutic products. The company entered an agreement with leading drug distributor Bayer Pharmaceuticals’ subsidiary Bayer Consumer Case earlier this year to distribute select medication throughout Mexico, making its involvement in the medical drug space somewhat passive, Karras said.
“It’s become a little more passive in the sense that Easton is not required to have its own sales force [thanks to] securing the distribution agreement that we have with companies like Bayer, who distributes the products for us,” Karras said. “That frees up our time to look at additional lucrative businesses to become more well-rounded.”
Easton Pharmaceuticals is a small-to-midsize firm with roughly a dozen employees based in Toronto. In addition to its Food and Drug Administration-approved cancer drugs, Easton has exclusive distribution rights in Mexico and select areas in Latin America for patented medications to treat bacterial vaginosis.
The company’s foray into commercial real estate is still in the early stages, and Karras foresees the company delving into other industries using proceeds from its real estate investments in the near future.
“Revenues and profits from these operations will help fund additional growth for the company [and] new acquisitions,” he said.