Poppy producer TPI buys CMO business to move into opioid drug production

With its $19.7 million deal to buy the CMO business of Vistin Pharma, TPI Enterprises will now have the ability to take the opiate raw material it produces and manufacture APIs and finished products.

Australia’s TPI Enterprises, one of the world’s key suppliers of opiate raw material, will now have the ability to process it into active pharmaceutical ingredients and finished products. It has struck a deal to buy the opioid and CMO tablet businesses of Norway’s Vistin Pharma.

TPI has agreed to pay AU$25 million ($19.7 million) to get the manufacturing operations in Kragerø, about 200 kilometers southwest of Oslo. The deal is slated to close in the fourth quarter of this year.

TPI said (PDF) those operations have the capacity to produce both APIs and finished dose products. More importantly, they produce about 35 tonnes of codeine phosphate API and 5 tonnes of pholcodine API and manufacture 1.6 billion finished dose tablets a year.

For Vistin, the decision was made so the company could concentrate on its core metformin business, Chairman Ole Enger said in a release. TPI is a supplier to Vistin, so the company knows TPI well and felt comfortable about it taking over the operations, he said.

For TPI, the deal is the realization of its plan to expand raw material demand by having a hand in the downstream market.

TPI CEO Jarrod Ritchie said in a statement that the deal, along with plans to build API manufacturing facilities in Portugal where it is now harvesting poppies and extracting opiate raw material, will turn TPI into a fully integrated opiate pharmaceutical business with global scale.

“Acquiring Vistin’s opiates and tableting division provides TPE with the opportunity to aggressively push to increase market share in Europe and grow in Asia’s emerging markets,” Ritchie said. “In turn, this will provide the demand to expand our (raw material) production in Australia, further driving down our unit costs of production and improving our capacity to grow market share.”

TPI, along with Johnson & Johnson and, more recently, Sun Pharma, are the three licensed poppy producers in Australia’s Tasmanian poppy industry, which produces about 85% of the global supply of thebaine, the opium poppy extract used to make Oxycontin and other similar drugs. Sun in 2015 bought out GlaxoSmithKline’s poppy businesses in Australia, making it one of only a few drug producers to have a “farm to market” opiate operation.