Recipharm will buy Corvette Pharmaceutical Services Group from private equity owners LBO Italia Investimenti to add much needed lyophilisation capacity and increase access to the Italian market.
The Swedish contract development and manufacturing organisation (CDMO) said it would buy Milan-based Corvette this morning, explaining that it will pay €100m ($133m), half in cash half in shares, and predicting that the deal will complete on October 1.
Corvette operates three manufacturing sites in Italy: a sterile injectables facility in Masate that houses freeze-drying and liquid filling capacity; an active pharmaceutical ingredient and finished dosage form plant in Paderno Dugnano; and an antibiotic lyophilisation centre in Lainate.
A Recipharm spokesman told Outsourcing-pharma.com that: “We see a number of benefits from the acquisition of Corvette part of which is sterile injectable capacity, particularly lyophilisation, where we have a shortage of capacity, but a lot of demand.”
“Ampoules will also be a useful addition as there is also good demand for those and we do not now have that capability. Other important factors include getting access to the Italian market which is quite fragmented and made up of small and mid-size companies.”
Italy and beyond
According to Recipharm Corvette generates 45% of its total annual revenue – around €58m last year – in Italy with a further 20% coming from sales to customers in emerging markets.
The spokesman told us “Corvette works with a whole variety of firms including big pharma, mid-size pharma and global generic companies. There are many small mid-size companies which are very interesting to us and a key target.
He added that: “In addition the overlap is very small and therefore we have some great cross selling opportunities. The geographical regions that are covered are essentially worldwide, but there is a focus on Italy.”
In addition to its Italian customer base, Corvette sells products in Japan, including sterile beta lactam antibiotics freeze dried at its plant in Lainate and APIs and finished drugs produced at Paderno Dugnano.
The sterile injectables site in Masate also supplies Japanese customers, but does not supply the US market according to the Recipharm spokesman.
Intellectual property boost
The other main motivation for the deal with Corvette’s intellectual property portfolio which includes “marketing authourisation, product rights and patents” the spokesman continued, adding that “a significant part is Erdosteine which supplied both in API and FDF to many global markets.”
Erdosteine is a treatment for bronchitis and bronchiectasis, which is a dilation of the small airways caused by chronic bronchitis or cystic fibrosis.