Patheon has been on an M&A blitz, buying up specialty manufacturers that can help it broaden its network as it muscles up as a global CDMO. But the North Carolina-based company is unafraid to shed assets that no longer fit that blueprint and so is selling a plant in Mexico to over-the-counter king Perrigo ($PRGO).
The Ireland-based drugmaker said Tuesday that it laid out $34 million cash for a Patheon soft-gel capsule manufacturing facility in Mexico City.
|Perrigo CEO Joseph Papa|
"Perrigo has long desired to be a prime manufacturer of softgel products and we believe the acquisition of Patheon's Mexican operations serves as an ideal entry point into the space," Perrigo CEO Joseph Papa said in a statement. "Additionally, and importantly, we believe Perrigo is uniquely positioned to maximize the potential of the business by leveraging our own Mexican operations to drive growth and value for our customers and shareholders."
The 10,289-square-meter (110,750-square-foot) site has four facilities which include manufacturing and warehousing, as well as R&D and administrative offices, Perrigo's director of global communications, Bradley Joseph, explained in an email. The plant will allow Perrigo to make softgel OTC products for the Mexican market.
"We are the largest store brand OTC business in Mexico," Joseph said.
Tyler Gronbach, vice president of communications for DPx, said the plant in Mexico is one that the company acquired a couple of years ago in its $255 million buyout of Mexico's gelatin capsules-and-coatings company Banner Pharmacaps. While Patheon now has softgel capabilities at other facilities, the OTC focus of the Mexico business not in line with what Patheon is now doing.
"We are turning Banner into a specialty pharma operation.The vast majority of Patheon's business is in biotech," Gronbach said. "We had an interested buyer in that OTC business and it was no longer a fit us." Gronbach said.
The sale, a bit of a turn of events for the CDMO since it has been on a buying spree. In March it picked up for an undisclosed sum Agere Pharmaceuticals, a Bend, OR, company that helps clients improve the absorption rates of their medications. A few weeks before that it acquired IRIX Pharmaceuticals, a North Carolina contract manufacturer that specializes in hard-to-make APIs. Patheon parent DPx bought Gallus BioPharmaceuticals last year to fill out its biologics offerings.
The Perrigo deal also comes as that company is being hotly pursued by generics drugmaker Mylan ($MYL), with an offer that now tops $34 billion but which Perrigo has cooly dismissed as inadequate. Meanwhile, Mylan has been thumbing its nose at an attempt by generic drug leader Teva Pharmaceutical Industries ($TEVA) to buy Mylan for about $43 billion.
- here's the announcement