CDMO Recipharm sees strong Q2 growth as expansion pays off

Recipharma saw its India operations add significantly to its Q2 results. (Recipharm)

Recipharm had a strong quarter as expansion added sales, contributing to a 21% jump.

The Swedish CDMO reported sales of SEK 1.7 billion ($193 million) in a quarter that saw some key M&A deals that should contribute more revenue going forward. The company said EBITDA increased 27%, reaching a record for a quarter.

“With our important investments and acquisitions we are taking leadership in selected markets,” CEO Thomas Eldered said in a statement.

Last month, Recipharm struck a deal with Sanofi to buy the French drugmaker’s contract inhalation drug business and plant in the U.K., picking up new capabilities and clients in the process.

RELATED: Recipharm to buy Sanofi inhalation contract business and plant in U.K. for $60M

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The CDMO will pay about £45 million ($60.2 million) for the 125,000-square-meter site at Holmes Chapel near Manchester, where Sanofi makes metered-dose inhalers and nasal sprays for contract clients. The deal is slated to close in the fourth quarter of 2018, at which point Recipharm will add the plant’s 450 employees. Recipharm said the CDMO said the transaction is expected to be accretive to EBITDA-margin and earnings per share beginning in the first quarter of 2019.

Recipharm also closed on a deal to acquire the remaining 26% of Indian sterile drugmaker Nitin Lifesciences that it didn’t already own. Recipharm paid 351 million Swedish kroner (about $43 million) cash and about $10 million in shares for the shares in Nitin still owned by the founding Sobti family. Two years ago, Recipharm paid $105.2 million to buy a 74% stake in the sterile injectables CMO.

Recipharm reported Wednesday that its India based operations saw 37% growth in local currency, contributing almost 4% to group growth.

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