Out with the old, in with the new? Lonza sells peptide biz, Recipharm adds Indian ops

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Recipharm receives approval to buy Kemwell’s Indian operations and PolyPeptides completes the acquisition of Lonza’s peptide business. Welcome to in-Pharmatechnologist’s 2017 M&A round-up.

Recipharm has waited almost nine months to add the Indian operations of fellow third-party manufacturer Kemwell but this week the Indian Foreign Investment Promotion Board has granted approval for the transaction to take place.

The contract development and manufacturing organisation (CDMO) agreed to pay a total of SEK 1.7bn ($190m) for Kemwell’s operations: SEK 693m was paid to Kemfin Holdings Private for the operations in Sweden and the US, while SEK 982m was paid to the Bagaria family for the Indian arm of the business.

“We acquired the Swedish and US parts of Kemwell back in May,” executive vice president of corporate development at Recipharm Mark Quick told this publication, and “we now have regulatory approval for the Indian part.”

The operations in Bengaluru – now known as Recipharm Pharmaservices Private Ltd – is the second move into India made by the firm, having acquired a 74% stake in Nitin Lifesciences last April for SEK 824m.

“We have a significant manufacturing footprint in the region and this provides us with good options,” said Quick.

“The Nitin Pharma acquisition is very much about accessing the local market and emerging markets. In particular supporting multinational companies with their requirements in India and emerging markets. Kemwell on the other hand brings a significant and cost effective development capability as well as manufacturing capabilities suitable for more developed markets including the US.”

Kemwell is one of a long list of acquisitions made by Recipharm since it went public in April 2014, and according to Quick further M&A activity is likely.

“We are certainly looking to further cement Recipharm as a leading CDMO and consolidator so further acquisitions in various geographies and technologies are certainly on the cards.”

Polypeptides and Lonza

Lonza has completed the sale of its peptide chemical development division, with operations based in Braine-l'Alleud, Belgium along with around 280 staff members going to privately held Swedish firm the PolyPeptide Group.

The sale, announced in December, is set to provide immediate access to additional large-scale capacity in synthesis, purification and isolation of peptides for PolyPetides.

“The addition of Lonza's Braine facility to PolyPeptide is a great fit and will offer customers an even more comprehensive range of services for every stage of development,” said PolyPeptide CEO Jane Salik in a statement.

“With this acquisition we will be expanding our capacity to meet the needs of customers who demand the highest quality products with the most robust, scalable and cost-efficient peptide manufacturing processes at every scale.”

Meanwhile, Lonza is awaiting its own acquisition approval having announced it was buying US capsule maker Capsugel for $5.5bn last month. The deal is expected to go through in the second quarter this year.

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