Recipharm AB announced that it has concluded the acquisition of Kemwell’s pharmaceutical businesses located in Bengaluru, India.
The acqusition expands Recipharm’s position in emerging markets, taking sales in these markets to more than SEK 800 million1, dominated by sales directly to the fast-growing pharma market in India.
Recipharm’s capabilities in India expand by:
- Providing access to significantly increased development operation both in scale and breadth of capabilities
- Working with customers with a strong U.S. ANDA2 project pipeline
- Adding U.S. FDA and EU approved highly efficient manufacturing options
- Expanding manufacturing capabilities, complementary technology to Nitin Lifesciences
The move further strengthens Recipharm’s synergistic business model by aligning Indian development and technology operations with the combined company’s manufacturing capabilities in India and Europe. In addition, there are potential commercial synergies from enhanced customer offering and cross selling, according to Recipharm.
India Transaction
Pro-forma net sales for the businesses for the calendar year 2016 amounted to INR 2,263 million, an increase of 5% in spite of fourth quarter sales being temporarily negatively affected by India’s demonetization scheme.
The acquisition price for the businesses in India amounts to INR 7,980 million (SEK 1,058 million3) on a cash and debt free basis.
As part of the transaction Recipharm also has a right of first negotiation to acquire Kemwell’s Indian biopharma business, which is not included in the transaction and will continue to be retained by the sellers.
“We are now in a position to offer our customers access to cost effective development and manufacturing capabilities able to serve international markets, including the U.S.,” Thomas Eldered, CEO of Recipharm AB, said. “These acquisitions are already showing great promise and I am pleased the current managing director, Anurag Bagaria, and VP corporate development, Karan Bagaria, will continue in their current positions going forward.”
Information on the Acquired Businesses
The acquired business now known as Recipharm Pharmaservices Private Ltd, was originally founded by Subhash Bagaria. It employs around 1,200 people and comprises both development services as well as commercial manufacturing of solid, semi-solid, liquid and topical products, with customer relations spanning decades.
The solid dosage plant was commissioned in 2008 and has approvals from U.S. FDA and EU among many other regulatory bodies. The oral liquids production plant was commissioned in 2011 and is specialized in automated high throughput large volume manufacturing, mainly for the Indian subcontinent. The development business is a rapidly growing business with a comprehensive service offering, including formulation development, small scale manufacturing for clinical trials and a large analytical services business.
(Note: SEK 1 = $0.11 on February 23, 2017)
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References:
1 Preliminary figure including already completed acquisition of majority stake in Indian company Nitin Lifesciences Ltd.
2 Abbreviated New Drug Application.
3 Exchange rate of INR/SEK of 0.1326.
(Source: Recipharm AB)
