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Home Market News Recipharm expands inhalation capabilities with acquisition of Sanofi CMO business located in UK
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13 Jun 2018

Recipharm expands inhalation capabilities with acquisition of Sanofi CMO business located in UK

Acquired business will enhance Recipharm’s scale and provide access to new customers and higher margin specialised technologies.

The acquisition of Sanofi’s manufacturing centre and business located in Holmes Chapel provides Recipharm with a solid platform to take further advantage of the growing respiratory drug market. It also adds additional inhalation commercial drug product manufacturing capabilities, complementing services already offered by Recipharm’s inhalation development facility in the US.

Thomas Eldered, CEO of Recipharm, commented: “Holmes Chapel brings Recipharm an ideal opportunity to accelerate its offering to customers with access to novel of respiratory products. As an already successful CMO with several clients, we look forward to introducing new contracts to Holmes Chapel by utilising our growing franchise in development services. Treatments for asthma and COPD are growing at a fast rate and we see many opportunities. The experienced management team and staff have already successfully attracted new customers and we look forward to building on this from the well-invested facility.”

“We are delighted that the Holmes Chapel site is being bought by a company who will further develop the site and its employees, and bring opportunities to utilise the existing technologies and capabilities” said Volker Keuth, Head of Cartridge Division & Emerging Markets, at Sanofi.

Transaction rationale

Market

  • Attractive end market – the respiratory drug market enjoys a higher growth rate and profitability for CMOs in relation to the general CMO market
  • Market growth is primarily driven by increased incidence of asthma and COPD
  • Complex production process of inhalators implies significant barriers to entry

    • Enhanced offering

  • Adds new capabilities to group in attractive technology area
  • Provides differentiation from competitors
  • Complements existing development capabilities

    • Strong customer relationships

  • Top tier client base including Big Pharma
  • Manufactures several recently launched products in growth phase
  • High potential to expand relationships

    • Operational benefits

  • Well invested facility with strong management and staff
  • Geographically close to Recipharm’s other UK facility providing potential operational synergies.

    • Attractive financials

  • Accretive to growth, margin and EPS
  • Strong cash flows

    • The Holmes Chapel manufacturing facility, which covers 125,000 m2, is located close to Manchester and is one of the leading sites of its type in Europe providing CMO manufacturing services. Several clients are serviced from the facility and a number of products, some of which that are still in their launch phase, are supplied. One such client is Vectura Group plc, for whom flutiform is manufactured. As part of the transaction, Sanofi has also entered into a long-term supply agreement for the products currently manufactured at the facility.

    The prime technologies of Holmes Chapel are metered dose inhalers and nasal sprays. The facility houses development areas for dry powder inhalation technologies.

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    Recipharm
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    Contract Development and Manufacturing Organisations (CDMOs) and Contract Manufacturing Organisations (CMOs) (Services) Contract Manufacturing Drug Delivery Devices & Systems (Products) Medical Devices and Medical Packaging Packaging Materials and Equipment (Products)

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