Sustained release specialist sold in $1.9B private equity deal, teeing up push into U.S. market

People shaking hands across a desk that has computer and papers on it
Partners Group wants to help Pharmathen build out its “on-the-ground presence” in the U.S. (rawpixel/Pixabay)

BC Partners has sold its majority stake in Pharmathen in a deal that values the sustained release drug delivery specialist at €1.6 billion ($1.9 billion). Private equity firm Partners Group has acquired the stake and outlined plans to accelerate the expansion of Pharmathen in the U.S.

Pharmathen, which BC Partners calls the leading European drug delivery technology company, is built upon sustained release technologies. The portfolio includes long-acting injectables, modified-release oral formulations and preservative-free ophthalmic formulations. Pharmathen pitches the injectable technology for use in generic drugs and to extend the life cycles of branded products. 

The technologies enabled Pharmathen to achieve a compound annual growth rate in earnings before interest, taxes, depreciation and amortization of 16% over the past five years. BC Partners bought its stake for €475 million in 2015 and went on to invest more than €250 million in the business.

Selling up to Partners Group could support further investment and growth. The Swiss private equity firm plans to work with the management team at Pharmathen to scale the business in Europe and globally, with a particular focus on building out its “on-the-ground presence” in the U.S.

Pharmathen serves global markets from two European manufacturing sites, the larger of which is a FDA-approved plant in Germany that has capacity to make 3 billion tablets and 2 billion capsules. 

The smaller Greek facility makes solid dosage forms and parenteral dosage forms. Having expanded the Greek site to make long-acting injectables in 2019, Pharmathen has the capacity to make 2.5 million ampoules for injection. When the expanded Greek facility opened in 2019, Pharmathen said it planned to invest more than €250 million through to 2024. 
Pharmathen’s investment in long-acting injectables comes at a time when a growing number of drug companies are looking to the technology to differentiate their products. GlaxoSmithKline is a high-profile advocate of the technology, having recently put long-acting injectables at heart of its HIV growth plans.