Swedish CDMO Recipharm’s growing global footprint in 2016 has positioned the company to take advantage of what is expected to be more consolidation and growth in the CDMO market.
In its annual report released Wednesday, the company highlighted several of its acquisitions last year, including Nitin Lifesciences in India, and India’s Kemwell, which gave Recipharm its first operation in the U.S.
“Our geographic footprint is now unique in the CDMO industry,” Thomas Eldered, Recipharm’s CEO, said in his letter to investors. “And going forward we will capitalize on our access to new customers, markets, capabilities and commercial synergies—and all the opportunities this brings.”
With the acquisitions last year, the company has established a strategic presence in both the emerging Indian market, and the lucrative U.S. market.
Last Spring, Recipharm announced it would spend $205 million in a two-part deal to expand both its drug development skills and API manufacturing. For about $85 million it got operations in Sweden and the U.S. that gave Recipharm Kemwell’s drug development business in Research Triangle Park, North Carolina; and for about $120 million it picked up Kemwell's operations in India that include FDA-approved API manufacturing.
That news came on the heels of the Swedish CDMO acquiring a 74% stake in India’s Nitin Lifesciences for $102 million. That gave Recipharm three manufacturing plants that specialize in small-volume production of sterile injectable products. Additionally, the company snapped up Mitim in Italy, which provides sterile liquids manufacturing services, and bought a Swedish company that focuses on solids.
“Our strategy is to provide customers with a one-stop shop for services, including many specialist activities, which gives us a competitive advantage over more niche-based companies that may be limited to a small number of potential customers,” the company said in the report.
Recipharm reported net sales of $520 million (SEK 4.7 billion) in 2016.
In the last few years, the CDMO business has been experiencing rapid consolidation. In just the last six months, Swiss CDMO Lonza acquired U.S.-based contract capsule and drug producer Capsugel for $5.5 billion, and Catalent bought San Diego-based Pharmtek to get spray drying technology, then turned around and bought Canada’s Accucaps, a developer and manufacturer of over-the-counter, high potency and conventional pharmaceutical softgels.