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Patheon completes $2.65 billion merger with DSM

Published on 18/03/14 at 08:27am
Patheon image

The $2.65 billion merger between Patheon and DSM’s pharma business has completed, creating a new privately-held company called DPx. 

The amalgamation of the two contract development and manufacturing organisations (CDMOs) was first announced last November, when Patheon and its softgel capsule specialist Banner Pharmacaps combined with DSM’s pharma chemicals and contract manufacturing divisions to create a pharma outsourcing powerhouse.

DPx is now thought to be the second largest CDMO in the marketplace behind Catalent with around $2 billion in combined annual sales, and is 51% owned by Patheon’s private equity owner JLL Partners and 49% owned by DSM International. The combined company is headed by Jim Mullen, who was chief executive of Patheon.

The structure of DPx will centre around three branded divisions, reorganised under the former brand names, and analysts have suggested the new company will probably seek additional bolt-on acquisitions to try to secure the number one position in the CDMO sector. 

Patheon Pharma Services will provide contract manufacturing of solid and injectable dosage forms and development services, as well as bioproduction capabilities transferred from DSM Pharma and fill/finish capabilities for biologic drugs.   

A division called DSM Fine Chemicals will provide active pharmaceutical ingredients and other ingredients, while the third unit - called Banner Life Sciences - will provide formulation technologies for pharma, over-the-counter (OTC) and nutritional product clients. 

“Starting today, we are better positioned to add scale, new value chain capabilities and technologies, as well as expand our end-to-end service offerings to our customers,” says Mullen. 

“This key strategic principle will drive future growth and position us as the global leader in the CDMO industry, with offerings unmatched by our competitors”, he adds. 

DPx has 24 locations across North America, Europe, Latin America and Australia - where DSM recently opened a biologics facility - and has a headcount of more than 8,000 employees.

Phil Taylor

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