CDMO Recipharm Acquires Corvette And Lyophilisation Capabilities
By Cyndi Root
Recipharm AB, a contract development and manufacturing organization (CDMO) announced in a press release that it has acquired Corvette Pharmaceutical Services Group, a contract research organization (CRO) in Milan, Italy. Recipharm states that it will benefit from the acquisition due to Corvette’s presence in Italy and its lyophilisation services and manufacturing, thereby enhancing Recipharm’s scale and profitability. The deal is expected to close on October 1, 2014.
Thomas Eldered, CEO of Recipharm, said, “Italy is an extremely interesting market made up of many small and mid-size companies where Recipharm currently has little presence. This combined with the significant sales in emerging markets represents an exciting opportunity.”
Recipharm and Corvette Agreement
Under the terms of the agreement, Recipharm values Corvette at 100 million Euros, which is to be paid in cash and convertible bonds. Corvette is due 15 percent in royalties over the course of ten years for its candidate, Erdosteine, an orphan drug in the U.S. Corvette adds its customer base in Italy and emerging markets, giving Recipharm an asset base in five of the largest European pharmaceutical markets. Corvette’s expertise in lyophilisation and its manufacturing capacity strengthens Recipharm’s offerings. Additionally, since 40 percent of Corvette’s revenue comes from Corvette’s Intellectual Property (IP) portfolio, the acquisition significantly increases Recipharm’s profitability.
Erdosteine
The deal specifically mentions the drug Erdosteine, which is an Edmond Pharma product, a subsidiary of Corvette. Approved in April 2014 for Orphan Drug status by the Food and Drug Administration (FDA), the agent treats bronchiectasis. Roberto Teruzi, Edmond’s CEO, said that its U.S. partner Alitair Pharmaceuticals was important to the approval and that in the U.S., there are no other FDA approved drugs for bronchiectasis. Erdosteine is currently marketed in over 40 countries and is being tested in clinical trials in the U.S.
Erdosteine is a mucolitic drug, a molecule with two sulphur atoms, which acts as a pro-drug, with no direct effect on gastric mucus. Similar therapeutics interfere with co-administration of antibiotics, unlike Erdosteine. Unlike thiol therapeutics, Erdosteine has good gastric tolerability after oral administration. The agent also displays anti-inflammatory activity, antibacterial properties, and antioxidant activity.