Drugmaker Upsher-Smith, source of Minnesota billionaire family's squabble, sold again

Upsher-Smith Laboratories Inc. — a long-standing Minnesota maker of generic drugs and the source of the Evenstad fortune that fractured the family and led to a five-year legal battle — has sold once again.

Bora Pharmaceutical Co. Ltd., the largest drug makers in Taiwan, paid $210 million for the company that initially sold to Japanese company Sawai Pharmaceutical Co. Ltd. in 2017 for $1.05 billion.

Upsher-Smith, which Frederick Upsher-Smith founded in 1919, sold to Ken Evenstad — married to the founder's granddaughter, Grace — in 1969. He and his son, Mark, built it into a thriving business, with Ken and Grace Evenstad eventually giving Mark Evenstad an extra 1.5% of their stock in 2014 for his decade of work as CEO that greatly increased the value of the company. But that stressed relations with their daughter, Serene Warren, as the siblings previously each owned 25% of the business.

Warren would go on to cut off communication with her family in 2016 and file a lawsuit shortly after the family put the company up for sale. And while Sawai's eventual purchase of the company ended the Evenstads' involvement in its business operations, Upsher-Smith still loomed large in the family's personal life.

In a scolding ruling issued this past March, a Hennepin County judge granted Warren less than a quarter of the $228 million she sought from the sale. Ken Evenstad died in 2020 after five years of chronic pulmonary illness.

In 2023 under Sawai's umbrella, Upsher-Smith opened a new $100 million, 270,000-square-foot, state-of-the-art manufacturing facility in Maple Grove. President and Chief Operating Officer Rich Fisher said he doesn't anticipate this latest sale changing any of Upsher-Smith's Minnesota operations.

"They were looking to expand into the United States," Fisher said of Bora.

In fact, these facilities will be Bora's first in the country. In a statement, Bora CEO Bobby Sheng said Upsher-Smith's "competitiveness is a perfect match for Bora's long-term growth."

In recent years, the generics business has been under pricing pressure. Lower prices for products has translated into lower profit margins, prompting Sawai to take a $640 million impairment charge — used to account for a large decrease in value of a certain asset — on the Upsher-Smith business in April 2022. Those industry dynamics explain the significantly lower price Bora paid compared to the previous sale.

The Upsher-Smith-Bora deal is subject to regulatory approvals before it closes.

"I think that overall, this is going to be good for the business," Fisher said.