Indian CMO latest acquisition in Recipharm's aggressive growth push
The Sweden-based CDMO (Contract Development and Manufacturing Organisation) has announced an agreement to acquire 74% of Nitin Lifesciences Limited - a sterile injectables CMO headquartered at Karnal in Northern India - for an estimated cost of INR 6712m ($103m).
The deal propels Recipharm into India, and according to Executive Vice President Mark Quick, is part of a plan to expand the CDMO’s presence in emerging markets.
“It is our stated aim to be a leading global CMO and emerging markets cannot be ignored as they represent a significant part of the pharma industry,” he told Outsourcing-Pharma.com.
“Many of our customers are seeking to grow in these regions. We have been searching for a while now for a high quality emerging market manufacturer to use as a platform for this strategy and we believe we have found it in Nitin Lifesciences,” he continued.
“The growth in the domestic Indian Pharma market is tremendous and we wanted to find a way to participate in this.”
Quality concerns
This is not the firm’s first foray into sterile injectables – it bought Italian firm Corvette last year for €100m – but a move into this sector does beg the question over quality concerns, especially as Indian aseptic drugmakers receive their fair share of warnings and alerts (here and here, for example).
“It is certainly true that there have been some quality issues in the region and we were of course aware of this before embarking on the project,” Quick told us. “We took this into account when we conducted our due diligence and looked very carefully at this.”
“We were actually pleasantly surprised in what we found and this reinforced our feeling that this was a high quality supplier,” he continued, adding “the fact that a number of new multi-national customers have been secured also provided us with more confidence.”
Aggressive Growth
The acquisition is the latest for Recipharm, and Quick said it forms part of an aggressive growth strategy being followed since the firm went public in June 2014.
“It is very clear that our industry is undergoing a rapid structural change and we want to be one of the drivers of this,” he said.
“The rationale for our IPO last year was to provide resources to participate and be a leading consolidator in the CDMO industry and we intend to continue to deliver on this commitment to fill the gaps we have both from a technological and geographical perspective.”
In the past 15 months, Recipharm has bought Portuguese contractor Lusomedicamenta, acquired a plant in France from Flamel Technologies, bought Corvette, invested in chemistry specialist Synthonics, acquired a stake in Pharmanest, and is set to buy a plant from Alcon.
