In efficiency bid, Novartis selling Alcon unit to Recipharm in $20M deal
- The Swedish contract manufacturer Recipharm has bought Kayersberg Pharmaceuticals from Novartis' Alcon unit. In a deal closed December 31, 2015, Recipharm bought 100% of Kaysersberg Pharmaceuticals for 18 million euros.
- Kaysersberg Pharma's main asset is a manufacturing plant in Kaysersberg, France. Additionally, Recipharm signed a long-term agreement to supply Novartis with ophthalmic products, worth 36 million euros in annual sales
- Through this deal, Recipharm expands its presence in France and Novartis sheds another unit in order to improve margins and increase their focus on core areas.
This deal highlights two key trends. As drug makers focus on category-specific leadership in lieu of dealing in-house, they are out-sourcing more functions. At the same time, CROs like Recipharm are positioning themselves to benefit from these opportunities by expanding capacity and leveraging regional assets.
Recipharm's business model supports this approach. It operates in Sweden, France, the U.K., Germany, Spain, Italy, and Portugal, focusing on "flexibility, local adaption and customer focus." Recipharm already has three other facilities in France, but will add Blow Fill Seal manufacturing capabilities through the acquisition of the Kaysersberg plant.
Blow Fill Seal technology is an aseptic process which molds a container from plastic, fills it, and seals it in one continuous process, minimizing contamination. "Blow Fill Seal technology is a very interesting area which we believe will grow and it therefore forms an important addition to our portfolio," said Recipharm CEO Thomas Eldered in a statement.
Selling Kaysersberg is part of Novartis's current strategy to refine its synergies. Last year, Novartis sold its animal health unit to Eli Lilly, in addition to selling its vaccines division to GlaxoSmithKline. In addition, Novartis has been selling off manufacturing facilities.
Recipharm will take on the approximately 260 employees of the Kaysersberg plant.