Consort Medical has placed a big bet on the convergence of drug and device production services, striking a £230 million ($374 million) deal to buy European contract manufacturer Aesica Pharmaceuticals. The resulting company would have the capacity to handle most aspects of drug and device development and manufacture from the supply of active ingredients through to fill/finish.
United Kingdom-based Consort Medical already provides device design, development and production services, but lacks the capacity to help clients with drugs they plan to deliver via its instruments. Buying Aesica would fill these gaps, allowing Consort Medical to take a client from API manufacture, through joint development of the drug and device and on to commercial supply. Consort Medical would also acquire seven facilities through the deal, including its first plants in mainland Europe.
The companies began working together on business opportunities last year, leading to a point at which management decided the firms could collaborate more effectively by merging. Some clients already work with both companies and Consort Medical aims to increase overlap through cross-selling. Buying Aesica will give Consort Medical closer ties to 15 pharmaceutical companies, including AbbVie ($ABBV), GlaxoSmithKline ($GSK), Johnson & Johnson ($JNJ), Merck ($MRK) and UCB.
Aesica was founded in 2004 through a management buyout of a U.K. plant run by BASF. Silverfleet Capital bought a majority stake in the business in 2011 and is now set to cash out by selling to Consort Medical. The deal is expected to close in November but is dependent on shareholder approval and antitrust clearance in Germany.