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April 18, 2016

Recipharm to acquire Kemwell’s CDMO operations in US, Sweden and India

Sweden’s Recipharm has agreed to acquire pharmaceutical contract development and manufacturing (CDMO) businesses from Indian-based Kemwell for Skr1.7bn ($209m), as part of two separate deals.

Sweden’s Recipharm has agreed to acquire pharmaceutical contract development and manufacturing (CDMO) businesses from India-based Kemwell for Skr1.7bn ($209m), as part of two separate deals.

As part of the deals, Recipharm will acquire Kemwell’s operations in the US, Sweden and India.

Recipharm will pay Kemwell’s owner Kemfin Holdings Private close to Skr693m ($85m) for operations in Sweden and the US.

Additionally, the company will pay Skr982m ($120m) for Kemwell’s Indian operations.

"These transactions represent a significant step in both the consolidation of the CDMO industry and the transformation of Recipharm into a global leader."

Recipharm CEO Thomas Eldered said: "These transactions represent a significant step in both the consolidation of the CDMO industry and the transformation of Recipharm into a global leader. We now have a US footprint, which we can use to further penetrate the world’s largest pharmaceutical market, and the business in Sweden provides us with several opportunities for synergies.

"When we receive the approval in India, Recipharm’s customers will have access to very cost effective development and manufacturing capabilities able to serve international markets including the US."

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Kemwell’s businesses in Sweden and the US employ nearly 260 people in total.

The US development business is involved in the development of inhalation, liquid, semi-solid, solid and parenteral products, while the Swedish business manufactures active pharmaceutical ingredients (APIs), solids and semi-solid formulations at two production units including a fully integrated primary and secondary manufacturing facility.

More than 95% of the Swedish production is exported to more than 60 countries including the US and Japan.

Kemwell’s acquired Indian business is expected to employ around 1,400 people at closing of the acquisition. It includes both development services as well as commercial manufacturing of solid, semi-solid, liquid and topical dose products.

The agreement also includes a right of first negotiation to acquire Kemwell’s Indian biopharma business, which is not included in the transaction and will continue to be retained by the sellers.

Kemwell chairman PerÅke Oldentoft said: "I am really excited about the combination of the companies and I am sure that under the Recipharm umbrella the business will continue to grow and provide high-quality products and services to its customers."

Subject to review by the Swedish Competition Authority, the acquisition of US and Swedish operations is expected to be completed in the second quarter 2016.

The acquisition of operations in India will be completed before the year end, upon receiving governmental approvals.

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