DPI, CDC partner to create $750m biopharmaceutical platform to broaden access of vital specialty generic drugs across Africa
Development Partners International (DPI) through its ADP III fund, CDC Group, the UK’s publicly owned impact investor, and the European Bank for Reconstruction and Development (EBRD) have joined forces in a ground-breaking deal to create a major new player in the pan-African pharmaceuticals industry.
The three founding investors have committed an initial $250 million of capital that have been used to fund the acquisition and combination of Adwia Pharmaceuticals, an Egyptian generic drugs manufacturer, and Celon Laboratories Pvt, an Indian oncology and critical care specialist. The platform will leverage its manufacturing and R&D centre of excellence in India to strengthen its local manufacturing operations in Africa, while capturing synergies from centralised supply chain management and business development.
This first of its kind Pan-African platform is designed to compete in large, fast-growing markets as well as high-demand, differentiated therapeutic areas such as oncology through innovation and cost leadership. The newly created platform will improve the delivery of essential and affordable specialty generic pharmaceuticals across the African continent. This will be supported by up to an additional $500 million fund raise, to fund a strong pipeline of acquisitions, assist in new drug development, and establishment of new distribution channels.
The platform is co-founded by the executive management team comprising Hocine Sidi-Said, Chief Executive Officer and Alhadi Alwazir, Chief Strategy Officer and Head of Corporate Development, who together bring decades of emerging market pharma experience, private equity transaction experience and a strong buy and build track record.
In addition to the significant value creation potential, the founding investors in the platform also expect significant health-related impacts (which will be measured) driven by drug affordability and availability. The positive impact of the investment on female empowerment, climate change mitigation, job quality and job growth will also be tracked.
Sofiane Lahmar, Partner at DPI commented, “For a number of years DPI has explored the establishment of a new pan-African pharma platform that can transform this significantly underserved and underpenetrated industry. We are thrilled to have brought together the consortium of DPI, CDC and EBRD, with the leadership of Hocine, Alhadi and their team, to achieve that vision. By creating this unique platform, we will deliver substantial, tangible impact by increasing the availability and affordability of quality drugs and by developing local production and reducing reliance on imported drugs across Africa. The platform will also offer a defensive, differentiated, and attractive opportunity for investors driven by the continued strong growth of the African generic pharma industry and its defensive and resilient nature demonstrated during the global COVID-19 crisis.”
Abhinav Sinha, Director & Head of Manufacturing at CDC, said: “The African pharmaceutical industry remains chronically underdeveloped, with over 80 per cent of prescription and over-the-counter drugs imported from outside of Africa. This platform is being built from the ground up to specifically address the challenges facing African healthcare providers and improving health security. It will make a significant impact by providing affordable vital life-saving treatments and increasing the range and quality of products available, while aiming to reduce the incidences of counterfeit products in the market.”
Hocine Sidi-Said, Chief Executive Officer of the platform, said: “The creation of this new biopharmaceutical platform will fundamentally change the way specialty medicines are made available across Africa. It will also look to invest in broad-based and high-growth specialty generics assets across Africa, in high-demand areas such as oncology, autoimmune diseases, diabetes, respiratory issues, and critical care. I am pleased that our vision has attracted and will continue to attract strong investor interest. We look forward to working with our three founding investors and with future investors to successfully fulfil our promise of affordable specialty products in jurisdictions historically deprived from access to such medications."
Legal advisors on the transactions were Freshfields Bruckhaus Deringer (International Counsel), Matouk Bassiouny & Hennawy (Egypt), and Shardul Amarchand Mangaldas & Co (India).