2022-11-30| M&A

Gland Pharma Dispels Rumors Of Fosun Sale, Acquires Cenexi In Separate Development

by Joy Lin
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Gland Pharma has issued an exchange filing on the Bombay Stock Exchange saying it was not aware of information that Fosun Pharma or its parent Fosun International were planning a sale of its shares, following rumors. 

Established in Hyderabad, India in 1978, Gland focuses on generic injectable drugs such as antibiotics, ophthalmology, cancer, and heart medication. The company manages four Active Pharmaceutical Ingredient (API) production plants with two R&D divisions staffed by nearly 300 scientists, and services more than 60 countries, including the US and Europe under a business-to-business (B2B) model. 

Fosun acquired 74% of Gland for $1.1 billion in 2017. Its ownership stake has since dropped to 57.86% according to exchange data. The Indian drugmaker’s market cap today is $3.8 billion. Shares of Gland were up 7.6% on Tuesday, representing its best day in more than a year. However, shares subsequently fell 5% on Wednesday following an announcement that the company will acquire French pharma Cenexi.

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Gland Buys Cenexi For $124 Million

Gland is buying French contract development and research organization (CDMO) Cenexi for €120 million, or around $124 million, via a Singapore-based subsidiary. 

Founded in 2004, Cenexi specializes in sterile liquid and lyophilized fill-finish drugs, with capabilities in oncology and complex products. Cenexi’s revenue is estimated to be €184.1 million in 2021.

Gland’s buyout of Cenexi brings in three manufacturing sites in France and one site in Belgium, as well as 1,372 employees. Furthermore, Gland will obtain the know-how in sterile forms, including ophthalmic gel, needleless injections, and hormones. 

“This proposed acquisition would be Gland Pharma’s first international acquisition, and it would perfectly support our goal of deepening access into the European markets,” commented Srinivas Sadu, MD, CEO of Gland Pharma. Besides expanding its global presence through expanding Gland’s offerings in Europe, the acquisition of Cenexi would further solidify Gland’s identity as an injectable-focused CDMO company, said Sadu. 

Meanwhile, equity firms, including Kodak Institutional Equities, have voiced their doubts on Cenexi’s sales growth, the margin of which is “unlikely” to scale up to Gland’s level even in the long run.”

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