Tergus Pharma to become full-fledged CDMO with new manufacturing facility

Tergus Pharma, which will begin construction of its first commercial manufacturing facility in July, expects the 100,000 square-foot plant to be complete in 2020. (Tergus Pharma)

A small company that is all about the development of dermatology drugs has snagged a new investor and will soon start on a manufacturing facility that will catapult it into the CDMO market.

Tergus Pharma says an investment from private equity investor Great Point Partners will allow it to build its first commercial manufacturing facility. The Durham, North Carolina-based company currently provides topical formulation development, in vitro permeating testing, clinical trial materials and other services.

“For years we have discussed building a commercial facility. The equity capital from GPP will enable us to do this,” Tergus CEO Vijendra Nalamothu said in a statement.

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Construction of the 100,000 square foot operation is slated to begin next month and to be complete in 2020, the company said. Terms of the deal were not disclosed.

RELATED: Novartis finally unloads 300 troubled U.S. generics to India’s Aurobindo for $1B

The investment comes as the dermatology market is undergoing big changes. Nestle last month announced it is in exclusive talks to sell its skin health unit for about $10.1 billion to a consortium led by private equity EQT Partners. That comes just five years after the Swiss company moved deeper into the skin products to diversify away from slower sales in food.

The investors will pick up prescription brands including acne topical treatment Epiduo, as well as aesthetic and consumer products. About 5,000 employees also are expected to move.

Novartis is in the process of selling its Sandoz U.S. dermatology business, a dermatology development center and about 300 generics to India’s Aurobindo Pharma. Bayer in 2018 offloaded its prescription dermatology portfolio to Dutch company LEO Pharma.

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