Ipca acquires Onyx, expands its contract manufacturing business

Ipca Laboratories, a pharmaceutical company, has acquired UK-based Onyx Scientific (Onyx), by buying out the holding company Onyx Research Chemicals. The move adds to Ipca’s contract manufacturing business, for which it has set up a separate division called Covenance. No financial details have been disclosed.

Ipca said in a statement that the acquisition will help both companies give better service to their global customers. Onyx has been providing chemistry solutions to the global pharmaceutical industry out of its Sunderland, UK facility. The company was founded by Dr Tony Flinn, who is also the chief executive officer. The company claims to have done work for about 150 organisations and is a preferred partner for  5 among the top 10 pharmaceutical companies in the world, according to this press release announcing the award of a contract.

In his blog about his company (http://onyx-scientific.blogspot.com), he mentions that he started the company in 2000 and in 2007, it grossed revenues of about 4 million pounds or about Rs 30 crore at current exchange rates, and enjoyed a profit before tax ratio of 12%. Current financials are not available.

The acquisition will marry the capabilities of Onyx in chemistry services for medicinal, pre-clinical and Phase I/II clinical trials, with Ipca’s ability to support Phase II to commercial scale programs, according to the statement.
Most large Indian companies have custom research and manufacturing services or CRAMS divisions. They have the skills, scale and the cost advantage in this area and have endeavoured to make this into a healthy and profitable revenue stream.

The journey has not always been smooth in this area though and the past few years have been tough, as their customers global pharmaceutical companies have been going slow with their growth plans, which has affected the business of most Indian contract manufacturing companies.

Ipca set up its CRAMS division called Covenance in early 2010 and has commissioned its new GMP kilo labs, which allow it to supply quantities ranging from kilo, pilot, and commercial from its site at Ratlam, Madhya Pradesh. 

Ipca’s share price was up by about 1.2% at the time of posting.

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