Private equity firm pays $195m for contract manufacturer JHP
pharmafile | January 8, 2013 | News story | Manufacturing and Production |Â Â CMO, JHP, Warburg PincusÂ
Private equity group Warburg Pincus has acquired sterile injectable drug manufacturer JHP Pharmaceuticals from its current owner Morgan Stanley.
The transaction sees JHP Pharma change hands for $195 million on a debt-free, cash-free basis, with JHP’s management team continuing to hold a minority interest in the firm, according to JHP.
The company has operated as a contract manufacturing organisation (CMO) whilst also selling a portfolio of branded drugs and developing generics. It employs around 370 staff and operates a 171,000 sq. ft. manufacturing facility in Rochester, Michigan.
The deal comes at a time when there have been shortages of many sterile injectable generic drugs in the US and elsewhere in the world in the last few years, and moves are afoot to provide incentives to manufacturers in the form of tax breaks and preferential reimbursement rates.
Sterile injectable manufacturing is also highly concentrated with five of the top manufacturers accounting for 80% of US production, and there is generally perceived to be a lack of back-up capacity.
JHP was founded just over five years ago to tap into the growth potential in the $30 billion US sterile injectable market, and the CMO said the growth capital and support from Warburg Pincus would allow it to “pursue … partnership and acquisition opportunities in both the branded and generic segments of the sterile injectable market”.
Among these initiatives is the launch of the first of additional in-house generics – due to take place this year – with Warburg Pincus’ support expected to result in “a considerably deeper and broader development pipeline for JHP”, according to the firm’s co-founder Peter Jenkins.
JHP first announced the creation of its generics division in June 2012, with 13 products across anaesthesiology, gastroenterology, infectious disease and women’s health categories.
Phil Taylor
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