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Business

PMC prevails in bid for Isochem

Deal is a generalist’s second pharma foray in recent weeks

by Rick Mullin
December 6, 2017

PMC Group, a diversified U.S. firm with several weeks’ experience owning a pharmaceutical chemicals company, has prevailed over Axyntis, a well-established French manufacturer of active pharmaceutical ingredients, in its bid to acquire Isochem, the former drug chemical operation of France’s SNPE.

The acquisition, for an undisclosed sum, takes a company with little experience supplying complex chemistries to the drug industry, into what is perceived as a lucrative market. It follows closely PMC’s purchase of YM Drugs & Chemicals, an Indian fluoroquinolone drug manufacturer, in October.

A pending deal for Isochem drew attention at the CPhI pharmaceutical ingredients conference in Frankfurt earlier this year, where industry watchers questioned whether inexperienced newcomers would be able to succeed in the highly regulated business. Executives pointed to the move of the major chemical makers Dow Chemical, Eastman Chemical, and Rhodia into the pharma chemicals market in the 1990s; all of them ended up leaving the business.

Raj Chakrabarti, an executive vice president of PMC, says the acquisition of Isochem puts his firm “in a solid position to serve all the regulated pharma markets around the world with cost-effective offerings of proprietary drugs, drug intermediates, and custom drug research & manufacturing services.”

Isochem, which was acquired from SNPE by the German investment group Aurelius in 2010, operates three facilities in France. Axyntis also operates several plants in France and planned to consolidate Isochem’s Pithiviers operation with one of its facilities if the deal went through.

Officials with Isochem confirmed in October that the sale came down to the two bidders.

Industry consultant James Bruno says it’s difficult to predict the outcome of PMC’s foray into drug chemical manufacturing. “I’m assuming they didn’t pay a whole lot for it,” he says of the acquisition. “And Isochem has a lot of assets on the ground with a lot of reactor capacity. They look good on paper.”

But the realities of competing in a specialized market may prove daunting for a generalist with little experience, Bruno says.

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