PharmSource - M&A in the Contract Manufacturing Industry: Implications and Outlook – 2018 Edition

This report is the 2nd edition of our analysis of Mergers and Acquisitions in the contract manufacturing industry. PharmSource is the most definitive, trustworthy source of strategic insight on this topic in the bio/pharmaceutical realm.

Scope

This report analyzes merger and acquisition (M&A) activity in the pharmaceutical contract manufacturing industry during the period 2015–2017. The services considered in this report are contract manufacturing of active pharmaceutical ingredients (APIs) and finished dose products, associated analytical services, and packaging. Contract research providers were excluded.

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Who should buy this report?

This 52-page report gives important, expert insight you won’t find in any other source. 28 tables and figures throughout the report illustrate major points and trends. This report is required reading for:

  • CMOs: market trends, strategic planning, competitive intelligence, performance benchmarking
  • Bio/Pharma: supplier performance benchmarking, market trends, competitive intelligence
  • Private equity and Stock analysts: target identification and analysis, portfolio company performance benchmarking

Companies mentioned

3SBio, ABC Laboratories, Absorption Systems, Abzena, Acacia Lifesciences, Accucaps, Accuratus Lab Services, Advanced BioScience Laboratories, Advantar Laboratories, Aeras, Agere Pharmaceuticals, AGIC Capital, Ajinomoto, Akorn, Albany ...

3SBio, ABC Laboratories, Absorption Systems, Abzena, Acacia Lifesciences, Accucaps, Accuratus Lab Services, Advanced BioScience Laboratories, Advantar Laboratories, Aeras, Agere Pharmaceuticals, AGIC Capital, Ajinomoto, Akorn, Albany Molecular Research Inc. (AMRI), Alcala Farma, Alcon, Alkermes, Alliance Protein Laboratories, Almac Group, Alphora Research, Altasciences, Amatsigroup, AmatsiQ, American Peptide Company, AMPAC Fine Chemicals, ams Laboratories, Analytical Biochemical Laboratory, Analytical Lab Group, Antibioticos de Leon, Apicore US, Aptuit, Arcadia SGR, Arch Pharmalabs, Arcinova, Ardena Holding, Ardian, Argenta Limited, Arlington Capital Partners, Array BioPharma, Asahi Glass Company, Ash Stevens, Astellas Pharma, AstraZeneca, Audax Private Equity, Aurobindo Pharma, Avara Pharmaceutical Services, Avid Bioservices, Avista Pharma Solutions, Axcellerate Pharma, Axolabs, B & C Group, Bachem, BASF, Bayer, BCM, Bemis Company, Bioclin Research Laboratories, Biocon, BioDuro, Biogaran, Biogen, BIOMEVA, Blanver Farmoquimica, Blue Stream Laboratories, Boehringer Ingelheim, Bora Pharmaceuticals, Brammer Bio, Bristol-Myers Squibb, Bushu Pharmaceuticals, Cambrex Corporation, Cambrex High Point, Cancer Genetics Inc., Capsugel, Captek Softgel International, CapVest Partners, Carbogen Amcis, Catalent Pharma Solutions, Cathay Capital, Cellca, Celonic, Cenexi, Cerbios Pharma, Charles River Laboratories, Clinical Supplies Management (CSM), Clinigen Group, CMC Biologics, Cobra Biologics, Co-Formulate Limited, Cognate Bioservices, Coldstream Laboratories, Companhia Brasileira de Esterilizacao, Cook Pharmica, CordenPharma International, Covance, Crucell, Crystallics, CU Chemie Uetikon, Cytovance Biologics, Daiichi Sankyo, Delpharm, Disposable-Lab, Doppel Farmaceutici, DPT Laboratories, EAG Laboratories, Edgewater Capital Partners, Emergent BioSolutions, Epic Pharma, Epirus Biopharmaceuticals, EQT, Eurofins Scientific Group, Euticals Group, Evonik Industries, Evotec, Exova, Experchem Laboratories, F. Hoffmann-La Roche, Famar, Fareva Holding, Fertin Pharma, Forest Laboratories, Formex, Fresenius Kabi Product Partnering, Frontida BioPharm, Gadea Grupo Farmaceutico, Galien LPS, GEA Group, GeneDesign, Generis, Generis Farmaceutica, GHO Capital, Gland Pharma, GlaxoSmithKline, Glycotope, Grand River Aseptic Manufacturing, Great Point Partners, Halo Pharmaceutical, Healix Infusion Therapy, Hitachi Chemical Co., Hospira, Hovione, Humanwell Healthcare, Idis, IDT Biologika, Impax Laboratories (Inactive), INC Research, Infa Group, inVentiv Health, IQ Pharmatek, IRIX Pharmaceuticals, Irvine Pharmaceutical Services, Isochem, Johnson Matthey, JSR Corporation, J-Star Research, KBI Biopharma, Kemwell Biopharma, Kremers Urban Pharmaceuticals, Kuecept, LGC, Lisapharma, Livia Group, Lonza Group, Lubrizol Corporation, Lyophilization Services of New England, Mariol Industrial, Marken, MaSThercell, Meda, Medicure, Merck / MSD, Merck KGaA, Microbiology & Quality Associates, Microbiology Research Associates, Micro-Macinazione, Millmount Healthcare, Minafin Group, Mitim, Miwana, Molmed, Mylan, Nelson Laboratories, Neuland Laboratories, NextPharma Technologies, Nitto Denko Avecia (Avecia), Noramco, Novacap Group, Novasep, NuPharm Laboratories, Ology Bioservices (formerly Nanotherapeutics), Olon, OnTarget Chemistry, Opexa Pharmaceuticals (Inactive), Orgenesis, PacificGMP, Pamplona Capital Management, Paragon Bioservices, PAREXEL International, Particle Sciences, Partners Group, Patheon, PCI Pharma Services, PCT (Progenitor Cell Therapy), Permira Advisers, Perrigo Company, Pfizer, PharmaCell, Pharmaceutical Development Services Division, Pharmapak Technologies, Pharmaron, Pharmaron Beijing Co, Pharmatek Laboratories, Pharmaterials, PharmaVize, Pharmorphix (Sigma Aldrich), Piramal Pharma Solutions, PMC Group, Polpharma, Polypeptide Group, PolyPeptide Laboratories, Porton Fine Chemicals, Powdersize, ProBioGen, Puracap Pharmaceutical, QS Pharma, Quality Compliance Laboratories, Quantum Pharma, Quantum Pharmaceutical, Quotient Clinical, Quotient Sciences, QuVa Pharma, Recipharm, Recro Pharma, Rentschler Biotechnologie, Roche, Ropack Pharma Solutions, Roquette Freres, Rovi (Laboratorios Farmaceúticos Rovi), R-Tech Ueno, Sandoz, Sanofi, Sartorius, Sartorius Stedim Biotech, Scynexis, Selexis, SeQuent, Serum Institute of India, SGS Life Science Services, Shanghai Fosun Pharmaceutical (Group) Co, Sharp Packaging Services, Shasun Pharmaceuticals, Shenzhen Hepalink Pharmaceutical, Shire, Siegfried Holding, Sinensis Life Sciences, SK Biotek, SK Capital Partners, Smith & Nephew, Sotera Health, Stemedica International, Sterigenics, SteriPack Group, Sterling Pharma Solutions, Strides Shasun (formerly Strides Arcolab), Sucampo Pharmaceuticals, Suir Pharma, Sun Pharmaceutical Industries, Swander Pace Capital, Swiss Pharma Nigeria, Symbiotec Pharmalab, Synerlab Group, Takeda, Teva Pharmaceutical Industries, TGA Sciences, The Carlyle Group, The Chemistry Research Solution (TCRS), The Ritedose Corporation, Therapure Biopharma, Thermo Fisher Scientific, TPI Enterprises, Transferra Nanosciences, Transgene, Trilantic Capital Partners, Unimedic Group, Unique Pharmaceuticals, UniTao Pharmaceuticals, United Parcel Service (UPS), Unither Pharmaceuticals, VGXI, Vibalogics, ViroCyt, Vistin Pharma, vivoPharm Pty, Wacker Chemie, Whitehouse Laboratories, WuXi AppTec, Xceleron, Xcelience, Yegna Manojavam Drugs and Chemicals, Zenotech Laboratories

Table of Contents

1. Executive Summary 1

2 Objectives and Methodology 2

3 Overview of M&A Activity 2015–2017 3

Target Characteristics 4

Acquirer Characteristics 9

4 Segment ...

1. Executive Summary 1

2 Objectives and Methodology 2

3 Overview of M&A Activity 2015–2017 3

Target Characteristics 4

Acquirer Characteristics 9

4 Segment Close-Ups of M&A Activity 2015–2017 13

Dose Manufacturing 13

API – Biologic 16

API – Small Molecule 17

Analytical Services 19

Formulation and Clinical Supplies Manufacturing 21

Packaging 24

5 Valuations 25

6 Facility Acquisitions 27

7 What It Means 34

8 The Outlook for M&A in the Manufacturing Services Industry 37

9 Notes on Methodology 39

10 Appendix 40

Service Acquisitions 2015–2017 40

Bibliography 47

Primary Research – Key Opinion Leaders Cited in this Report 47

About the Authors 48

List of Tables

Table 1: CMO Services Businesses Acquired as Part of Larger Deals, 2017 6

Table 2: Company Acquisitions by Target Service and Size, 2015–2017 9 ...

Table 1: CMO Services Businesses Acquired as Part of Larger Deals, 2017 6

Table 2: Company Acquisitions by Target Service and Size, 2015–2017 9

Table 3: Company Acquisitions by Target Service and Ownership, 2015–2017 9

Table 4: Company Acquisitions by Target Market Scope and Size, 2015–2017 10

Table 5: Most Active Acquirers, 2015–2017 14

Table 6: Company Acquisitions of Dose Manufacturers, 2015-2017 17

Table 7: Company Acquisitions of API – Biologic Manufacturers, 2015–2017 20

Table 8: Company Acquisitions of API – Small Molecule Manufacturers, 2015–2017 21

Table 9: Company Acquisitions of Analytical Services, 2015–2017 23

Table 10: Company Acquisitions of Formulation Manufacturers, 2015–2017 26

Table 11: Company Acquisitions of Contract Packagers, 2015–2017 27

Table 12: Services Deals with Known Transaction Value and Multiples, 2015–2017 28

Table 13: Facility Acquisitions by CMOs, 2015–2017 34

Table 14: Most Active Acquirers, 2015–2017 37

Table 15: Acquisitions by PE Firms, 2015–2017 38

Table 16: Potential Targets: API – Biologic (Non-Cell and Gene Therapy) Service Providers 40

Table 17: Potential Targets: API – Biologic (Gene and Cell Therapy Only) Service Providers 41

Table 18: Service Acquisitions, 2015–2017 43

List of Figures

Figure 1: Company Acquisitions by Target Service Offering, 2015–2017 7

Figure 2: Company Acquisitions by Target Revenues, 2015–2017 8

Figure 3: Company Acquisitions ...

Figure 1: Company Acquisitions by Target Service Offering, 2015–2017 7

Figure 2: Company Acquisitions by Target Revenues, 2015–2017 8

Figure 3: Company Acquisitions by Target Ownership, 2015–2017 8

Figure 4: Acquisition Targets by Sophistication of Capabilities 12

Figure 5: Number of Acquisitions by Acquirer’s Core Business 13

Figure 6: Number of Acquisitions by Acquirer Ownership 14

Figure 7: Number of Acquisitions by Principal Acquirer Motivation 15

Figure 8: Dose Forms Manufactured by Acquired Dose Manufacturers 16

Figure 9: Pharma CMO Facility Acquisitions, 2015–2017 31

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