MUMBAI – Piramal Enterprises Ltd. has kicked off M&A activity for 2015 in India. The group with interests spanning healthcare to investments in financial firms and real estate announced Jan. 16 it will buy Coldstream Laboratories Inc., a Kentucky-based specialty pharmaceutical contract development and manufacturing organization, for an investment of $30.65 million.

Piramal bagged Coldstream through a competitive bidding process that it claimed focussed on both creating value for the previous owner the University of Kentucky and also on securing a good future for Coldstream and its employees.

The Deal Bill

“Piramal’s track record of making acquisitions, successfully integrating those businesses and making follow on investments were all factors taken into account in the process,” Vivek Sharma, CEO of Piramal’s pharmaceutical solutions business informed PharmAsia News in an e-mailed statement.

The deal valued Coldstream’s assets at around two times projected 2014 revenues, which analysts said was a “modest” payout. In particular, Coldstream’s isolator technology, which allows flexibility in executing a wide variety of manufacturing processes, is seen as a significant leap for the Indian drug maker in providing large scale commercial manufacturing and production of highly potent compounds.

The all-cash transaction will go towards the acquisition of a U.S. FDA-approved manufacturing facility of a sterile injectable unit and share buyout from Kentucky Research Foundation, an affiliate of the University of Kentucky, the majority owner of the company.

With staff strength of roughly 90 executives, Coldstream said it offers a full spectrum of services from clinical trials to commercial-scale manufacturing of sterile liquid and lyophilized parenterals and injectables. “Coldstream has developed differentiated expertise to formulate and manufacture high potency and cytotoxic compounds including Antibody Drug Conjugates (ADCs),” the company said in a release, highlighting its steadily increasing revenue from $9 million in 2012 to an estimated $14 million by the end of 2014 financial year.

“Coldstream is a very high quality operation and has been able to build significant customer relationships and track record for sterile products,” Sharma said.

Synergies, ADC Focus

“This acquisition allows PEL to move further into the injectable market segment and should have strong synergy with our existing pharma solutions business. Our strong capabilities in sterile product development and in ADC product segment will allow us to offer an integrated solution to our customers,” Sharma explained.

Coldstream boasts of its mobile isolators and notes that it provides an ISO Class 5 environment for aseptic processing and minimizing human contact with the products it manufactures.

Among several partnerships, Coldstream said in Sept. 2014 it is working with CytImmune, a nano medicines firm specializing in targeted tumor therapies, to manufacture CYT-6091, comprising gold nanoparticles bound with an immune-avoiding component (PEG-Thiol) and tumor necrosis factor alpha, for its Phase II clinical trials.

Sharma said in e-mailed answers that Piramal has for some time been looking to expand its sterile capabilities to serve the sterile development and contract manufacturing market segment, which is growing at close to 10% per annum.

“Piramal is already the global leader in the provision of Antibody Drug Conjugation and is also a leader in sterile drug formulation through its Mumbai facility. The addition of Coldstream will provide our ADC customers and our Mumbai formulation development customers with badly needed fill-finish services,” he noted.

Coldstream has shown tremendous growth and has an exemplary track record of supply and now needs the support of a larger business to help it develop and grow further, according to Sharma. Going forward he said, “Piramal is expected to provide capital to expand Coldstream’s commercial scale activities and support from its Mumbai systems, operational excellence, finance, human resources, regulatory and patents teams.

Piramal’s appetite to buy Coldstream is understandable. In 2014, its pharmaceutical solutions and critical care business together accounted for more than 60% of its overall activity in the pharmaceutical business of INR28.77 billion ($470 million) and grew at over 14%. It is therefore seeking global traction to engage with discovery research companies.

Piramal Bags Coldstream For Edge In Antibody-Drug Conjugates

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