PharmaZell and Novasep discuss merger to create leader in small molecules

API producer PharmaZell and contract development and manufacturing organisation (CDMO) Novasep have entered into negotiations to combine both companies to create a European leader in API manufacturing and the CDMO market.

The combination of the two businesses would create a highly diversified, and highly differentiated API manufacturing and CDMO platform. The companies state they would be able able to draw from a comprehensive and broad technology suite for complex molecules and a global production footprint to support pharma and biotech customers over the complete lifecycle of a drug.

PharmaZell and Novasep expect their combined businesses to generate nearly €500 million in revenue and employ around 2,000 employees across seven production and R&D sites in Europe, two sites in India, and one in the US.

Whilst details of the negotiations are yet to be released, the agreement would be backed by PharmaZell’s current majority shareholder Bridgepoint.

Novasep manufactures complex small molecules for pharma and biotech customers. It leverages a wide range of technologies such as high energy and cryogenic chemistries and industrial scale chromatography. The company’s capabilities would complement PharmaZell’s expertise in the manufacturing of complex APIs requiring special handling procedures or technologies.

Dr Sylke Hassel, CEO of PharmaZell who would lead the combined business, said: “We are very excited to partner with Novasep. The combined entity would serve our customers as a partner for complex molecules. Combining Novasep and PharmaZell, this new integrated approach would benefit our customers who would gain from the simplicity and efficiency of working with one company along the lifecycle of a drug. We look forward to bringing together our teams to deliver science and complex products to our customers and patients. We are committed to making this partnership a success.”

Dr Michel Spagnol, CEO of Novasep who would join the Board of the combined business, said: “With PharmaZell, we have found a highly complementary partner from a technology, customer and capability perspective. The transaction would enhance our customer value proposition, increase diversification and allow the combined business to address a much larger customer need.”

 Dr Axel Herberg, Chairman of PharmaZell, added: “I am looking forward to the combination of two very successful organisations. We would create one great company, that would be world leading in its sector. Both organisations share the same values, quality focus and high ethical standards to serve our customers and the health care markets. I would be delighted to welcome Michel as a highly esteemed member to our Board.”