Corden Pharma: vaccine supplier is for sale

Moderna vaccine

Corden Pharma manufactures lipids needed for the vaccine.

(Photo: imago images/ZUMA Wire)

Frankfurt According to financial sources, the German pharmaceutical supplier Corden Pharma is for sale. Owner International Chemical Investors Group (ICIG) is already holding initial meetings with interested parties and plans to send out detailed information packages to potential bidders by the end of the month, according to several people familiar with the matter. The ICIG, which is working with the investment bank William Blair on the transaction, is hoping for a valuation of up to three billion euros.

Investment companies in particular are interested in the company from near Heidelberg, it said. Well-known private equity firms such as Bain, Blackstone, Cinven, EQT and Permira will at least send the info memo. It is still unclear who actually bids in the end. ICIG declined to comment and Corden Pharma and William Blair could not be reached for comment.

The long-awaited sale was delayed as Corden Pharma adjusted its structure. At the end of 2021, the company bought three production sites from the Swiss competitor Vifor and sold peripheral areas in Italy. The portfolio is now complete and the sales process is about to begin.

ICIG wants to focus on its chemicals business with the sale of Corden Pharma. The company also includes the agrochemical company Weyl Chem, the PVC manufacturer Vynova and the wood preservatives manufacturer Rütgers Organics.

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Corden Pharma, formerly part of the British pharmaceutical group Astra-Zeneca, is a contract developer and manufacturer for manufacturers of active pharmaceutical ingredients and medicinal products. Corden produces the necessary additives for the Covid vaccine production and has concluded a lucrative contract with the US manufacturer Moderna.

Corden Pharma has expanded capacities for corona vaccines

The company makes four lipids that are necessary for the manufacture of mRNA vaccines. Corden competes with the Austrian Polymun, which supplies Biontech and Curevac, for example.

Corden Pharma has greatly expanded its production capacity for lipids during the pandemic. The high demand for vaccines has meant that the operating profit (Ebitda) expected for 2022 has jumped to between 250 and 300 million euros. Listed contract manufacturers like Lonza, Catalent and Siegfried are trading at 16 to 28 times forward earnings. A valuation of around 16x for Corden would therefore be reasonable from the point of view of some bidders, according to people familiar with the matter.

In their evaluation, however, potential buyers will critically examine how profitable Corden Pharma will be when the Corona boom subsides. Some prospects estimate long-term Ebitda at 170 to 180 million euros annually and believe 2.5 billion euros is a reasonable valuation, the people said.

Like Corden, other investors are trying to profit from the Corona boom and sell at the right time. According to financial sources, the investment company Navis Capital is currently preparing the Luxembourg company B Medical Systems for sale, also with the help of William Blair. The company, which specializes in refrigerated medical transport – for vaccines, for example – has an EBITDA of around 30 million euros and could be valued at around half a billion, it said.

Analysts expect business to return to normal

According to industry experts, the three mRNA vaccine manufacturers Biontech, Pfizer and Moderna will have sales of 55 to 60 billion dollars with the Covid vaccines in 2021. According to the company’s information so far, the manufacturing costs amount to 16 to 17 percent, i.e. nine to ten billion dollars, of which the greater part is likely to be attributable to external suppliers and service providers.

So a large additional market has emerged that many companies share. Established pharmaceutical companies such as Sanofi or Novartis also act as contract manufacturers or bottlers for Covid vaccine manufacturers.

And further growth is in sight: Moderna wants to roughly double production, Pfizer/Biontech want to increase it from three to four billion doses. For the coming years, however, most analysts assume that business will normalize and sales will fall.

More: Biontech develops an AI system for the early detection of virus variants.

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