Recipharm makes another buy to scale up its European might

Recipharm CEO Thomas Eldered

Swedish contract drug developer Recipharm has signed a deal to extend its reach into France, buying a new facility and partnering with a local firm.

Under the agreement, Recipharm is paying €10.6 million ($13.2 million) to Flamel in exchange for a development and manufacturing facility in Pessac, France, inheriting about 115 employees and several ongoing contracts. In a separate agreement, Recipharm has signed up to invest €10.5 million ($13.1 million) in the French company, giving it a 2.3% stake, and the two have entered a long-term deal that will see them share technologies and collaborate on projects.

The deal, expected to close by year's end, is designed to increase Recipharm's scale and reach in drug development, the company said.

"Development services is in many respects a 'local' business, so having another center in addition to Sweden should allow us to increase this aspect of our business," CEO Thomas Eldered said in a statement. "Our investment into Flamel is also particularly exciting given the clear strategy that they are pursuing. The commitment we are both showing towards each other is a clear demonstration of the bright future we see for this relationship."

The deal is Recipharm's third since going public earlier this year, coming on the heels of this month's $140 million acquisition of Portuguese CDMO Lusomedicamenta Sociedade Técnica Farmacêutica and the company's $164.5 million August buyout of Italy's Corvette Pharmaceutical Services.

The deal follows a wave of consolidation in the CDMO business, headlined by the $2.6 billion agreement that merged Patheon and DSM into the conglomerate DPx, which in September acquired biologics manufacturer Gallus BioPharmaceutials for an undisclosed sum. AMRI ($AMRI), another CDMO, spent more than $150 million on M&A this year to expand its capacity.

- read the statement (PDF)

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