A brand-new contract development and manufacturing organization (CDMO) has broken onto the scene, but this is one with a long history.
The new CDMO is U.K.-based Sterling Pharma Solutions and was created from a buyout by managers of a nearly 50-year-old facility in Dudley, U.K., from Strides Shasun, the drugmaker that resulted from last year’s $200 million deal merger of two Indian players, Strides Arcolabs and Shasun Pharmaceuticals. The site in England was formerly operating as Shasun Pharma Solutions.
The opportunity for the buyout came after Strides Shasun decided the CDMO business at Dudley site was not within its business-to-consumer strategy, a spokesperson for Sterling said. Terms of the MBO, which was completed in September, were not disclosed, but in May Shasun made a filing with the Bombay Stock Exchange saying it intended to sell the operation, which it acquired in 2006, and valued the operation at £25 million ($35.6 million.) It said at the time that that the operation last year had sales of €43 million but had some issues after “the failure of a key customer product.”
Kevin Cook, who has worked at the Dudley API facility for more than 20 years, is heading Sterling and says it is a new era for the operation near Newcastle.
“We have experienced significant growth in the U.S. and Europe in recent years and believe the extensive capabilities at our site, coupled with our heritage in the API services sector, provide us with an excellent foundation to become the leading partner and provider of API services to the pharmaceutical industry,” CEO Cook said in a statement. “We also have the capabilities to handle the most hazardous chemical processes safely.”
The site in northern England has been operating for 47 years. It sits on 42 acres, has 330 employees and offers API development and cGMP manufacturing services from clinical through to large scale commercial supply. It has a reactor capacity of 450 cubic meters.
This deal comes as M&A has been remaking the contract manufacturing industry. Just last week, generic East Rutherford, NJ-based API maker Cambrex ($CBM) announced a $25 million deal to buy Pharmacore, a clinical supply manufacturer with a 35,000-square-foot facility in High Point, NC.
Earlier in the year, Swedish CDMO Recipharm has done a series of M&A deals in the last couple of years, to broaden its capabilities. Earlier this year, it it did a two-stage, $205 million deal to buy operations in both the U.S. and India from India’s Kemwell. That deal followed one week after Recipharm spent $102 million to buy a 74% stake in India’s Nitin Lifesciences to get into small volume production of sterile injectable products.