CDC Group Plc and two other institutions have formed a pan-Africa pharmaceutical platform that has acquired India’s Celon Laboratories Pvt. Ltd and merged it with Egyptian generics drugs maker Adwia Pharmaceuticals.
CDC said in a statement that the British development finance institution has joined forces with Africa-focused private equity firm Development Partners International (DPI) and the European Bank for Reconstruction and Development to invest in the platform. The three investors will initially put in $250 million (Rs 1,858 crore) in the platform.
The platform will raise another $500 million to fund a strong pipeline of acquisitions, assist in new drug development and create new distribution channels, CDC said.
VCCircle first reported last week that CDC and DPI had come together to float a pharmaceuticals platform, which had acquired drugmaker Celon and an African company.
CDC didn’t disclose the value of the deal to acquire Celon Labs. However, VCCircle reported last week that the platform would acquire Celon for $75 million (Rs 558.5 crore).
The new platform will leverage its manufacturing and R&D centre of excellence in India to strengthen its manufacturing operations in Africa, while capturing synergies from centralized supply chain management and business development.
Abhinav Sinha, director and head of manufacturing at CDC, said in the statement the African pharmaceutical industry remains chronically underdeveloped, with over 80% of prescription and over-the-counter drugs imported from outside of the continent.
Sofiane Lahmar, partner at DPI, said the platform will help increase the availability and affordability of quality drugs, develop local production and reduce reliance on imported drugs across Africa.
The company was founded in 2007 by Vimal Kumar Kavuru and Vijay Kumar Vasireddy. It is a specialty-focused pharmaceutical company with a focus on the oncology and critical care segments.
The company exports to more than 50 countries, its website shows. These include several countries in Asia and Latin America as well as the African nations of Namibia, Nigeria, Kenya, Sudan and Ghana.
In 2010, venture capital firm Sequoia invested $15.51 million in Celon. The VC firm pumped more money into the pharmaceuticals company through 2016 but the exact quantum invested could not be ascertained. Sequoia has exited Celon as part of the latest transaction, a person familiar with the development had told VCCircle.
According to a May 2020 India Ratings report, Celon derived 32% of revenue from exports in 2018-19 to more than 44 countries in the less and semi-regulated markets in Africa, Latin America, Asia and the Commonwealth of Independent States.
The company clocked net sales of Rs 182 crore for the year through March 2019, compared with Rs 142.88 crore the previous year, according to VCCEdge, the research arm of Mosaic Digital. Its operating profit expanded to Rs 28.23 crore from Rs 23.32 crore.
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