< PreviousM&A ROUND-UP 10 Pharma Business International www.pbiforum.net age and older. Kevin Ali, Organon CEO, said: “We look forward to combining Dermavant’s strong dermatology commercial and field medical organization in the U.S., with Organon’s market access capabilities, regulatory expertise and worldwide commercial reach. This will allow us to bring VTAMA cream, a patient-focused innovation in dermatology, providing an effective, well-tolerated, non-steroidal treatment option to the millions of people living with plaque psoriasis and potentially atopic dermatitis.” Organon has agreed to acquire Dermavant for aggregate consideration of up to approximately $1.2 billion, with an upfront payment of $175 million and a $75 million milestone payment upon regulatory approval in AD, as well as payments of up to $950 million for the achievements of certain commercial milestones. In addition, Organon will pay Dermavant shareholders tiered royalties on net sales. Telix - RLS Furthermore, Telix is to acquire RLS (USA) Inc., America’s only Joint Commission-accredited radiopharmacy network distributing PET, SPECT and therapeutic radiopharmaceuticals, from its parent company, RLS Group Ltd. The deal expands Telix’s North American manufacturing footprint and establishes the basis of a next generation radiometal production network to benefit Telix and select strategic commercial partners. The purchase price comprises upfront cash consideration of $230 million and deferred cash consideration up to a maximum of $20 million, contingent on achievement of certain milestones. The acquisition of RLS is aligned to Telix’s investment strategy around vertically integrated supply chain, manufacturing, and distribution, further enabling the delivery of future clinical and commercial radiopharmaceutical products. Telix will leverage RLS’ 31 licensed radiopharmacies located in major metropolitan areas across the U.S. to build a radiometal production and distribution network for key therapeutic and diagnostic isotopes alongside last- mile delivery of finished unit doses in relevant markets. The deal also provides a clear pathway to extensively deploy Telix’s ARTMS QUANTM Irradiation System (QIS) cyclotron technology, enabling standardised, high-efficiency and cost-effective production of radiometals. By augmenting its existing distribution network, Telix aims to provide additional supply chain backup and improve capacity to meet future demand, while broadening access for patients across the entire U.S. market. RLS will continue to service its existing customers and operate as an independent business unit under Telix Manufacturing Solutions (TMS). Carlyle - Baxter In a larger deal, medtech Baxter International and funds managed by global investment firm Carlyle have signed a definitive agreement under which Carlyle is to acquire Baxter’s Kidney Care segment, to be named Vantive, for $3.8 billion. Baxter announced intentions to form a standalone kidney care company in January 2023 as part of its broader strategic realignment to enhance future performance and create value for all stakeholders. In March 2024, Baxter revealed that it was in discussions to explore a potential sale of the segment. Carlyle’s investment in Vantive is made in partnership with Atmas Health, a collaboration among three industry executives founded in September 2022 to focus on acquiring and building a market-leading healthcare business. The partnership, consisting of Kieran Gallahue, Jim Hinrichs, and Jim Prutow, brings a proven track record of creating value in the medical technology industry. Kieran Gallahue will serve as the chairman of Vantive, working with CEO Chris Toth and the Vantive management team. “I look forward to partnering with the combined Carlyle and Atmas team and working with my colleagues to advance Vantive’s mission of extending lives and expanding possibilities,” said Chris Toth, executive vice president and group president, Kidney Care at Baxter, who will serve as Vantive’s CEO. “Today’s announcement signals a new chapter in innovation on behalf of the patients and care teams around the world who rely on our solutions. Through this transaction, Vantive will be well-positioned to deepen our commitment to elevating dialysis through digital solutions and advanced services, while looking beyond kidney care to invest in transforming vital organ therapies.” Collegium Pharmaceutical - Ironshore Therapeutics Finally, Collegium Pharmaceutical is set to acquire Ironshore Therapeutics for $525 million in cash with the potential for Pharma Business International 11 www.pbiforum.net M&A ROUND-UP an additional $25 million commercial milestone payment. Ironshore is a privately held, pharmaceutical company that markets and distributes Jornay PM (methylphenidate HCl), a central nervous system (CNS) stimulant prescription medicine for the treatment of attention deficit hyperactivity disorder (ADHD) in people six years of age and older and the only stimulant medication that is dosed in the evening. The acquisition of Ironshore will represent a significant milestone in advancing Collegium’s mission of building a leading, diversified specialty pharmaceutical company by expanding the company’s business beyond pain management and establishing a commercial presence in a new and growing market. Michael Heffernan, chairman and interim president and CEO of Collegium, said: “The Ironshore acquisition is a unique opportunity to deliver a transaction that is immediately accretive to Collegium while meeting all of our strategic objectives through the addition of a growing commercial asset that diversifies our portfolio, has significant revenue potential and exclusivity into the 2030s. The addition of Jornay PM will establish a new presence for Collegium in ADHD, a large and growing market, where we can leverage our core commercial competencies and proven commercial execution capabilities to maximize the brand’s potential.” These represent a mere handful of the deals revealed since our last issue. © stock.adobe.com/HalfpointTRACEABILITY 12 Pharma Business International B eyond safety, traceability is instrumental in ensuring top-notch quality across the entire supply chain. By meticulously documenting each stage of production, manufacturers can identify potential bottlenecks or inefficiencies, allowing for continuous improvement. This level of oversight empowers producers to make data-driven decisions, optimize processes, and maintain consistent quality standards. Moreover, traceability promotes accountability among suppliers and stakeholders. With clear records of every component involved, it becomes easier to pinpoint the source of issues or inconsistencies. This, in turn, encourages greater responsibility and adherence to stringent quality benchmarks throughout the supply chain. Traceability enables the tracking of each step, thereby minimizing the risks associated with contamination, fraudulent practices, or unforeseen issues such as mistakes in processing or packaging. In the event of an illness outbreak or a quality concern, swift and precise traceability mechanisms facilitate targeted recalls, limiting the impact on consumers and preventing widespread health crises. However, traceability has also Track and trace Proper traceability systems not only help prevent a crisis, but also put criminals on the backfoot. 14 Á© stock.adobe.com/KMPZZZTRACEABILITY 14 Pharma Business International www.pbiforum.net proven useful in combating criminals pushing counterfeit drugs. The largest reported numbers of counterfeit pharmaceuticals was in North America, followed by Asia-Pacific and Latin America. In the year leading into 2021, the number of reported counterfeit cases spiked by over 35%, reaching its highest point since records began over 20 years ago. While counterfeit drugs are in theory a problem for police and law enforcement, many criminals are getting away with it because of less-stringent measures taken by pharma manufacturers. Simplistic packaging, easily copied designs and a lack of communication with consumers is allowing criminals to make billions. Now, traceability may be the best weapon the industry has to fight counterfeiters. Every separate process along the way is known as a traceability system – the combined entirety of data and operations which contains and maintains all information about a product. As a product moves between stages, the system records all data required to not only keep track of where it is in the production chain, but also to track its progress back to its point, or points, of origin. Depending on the business using such a system, they can either be small scale and trace movement within a single supply chain, or © stock.adobe.com/BillionPhotos.comPharma Business International 15 www.pbiforum.net TRACEABILITY more sophisticated for industry overseeing a larger production system. Whether proceeding for a large or smaller industry environment, the more data can be kept on every single item in your supply and production chain, the better. More information can only make it easier to identify a flawed product, and reduce time and money wasted in the long run. Legally there must be traceability information for any suppliers and business customers, known as one step back and one step forward. Retailers or caterers who supply pharmaceutical products must also adhere to this law, including proper labelling and health and identification marks, on packaging or directly on the item itself. Of course, none of this will matter at all without good communication with consumers, who need to be informed of the dangers of counterfeit drugs and how – and why – they should check your packaging to confirm the product is real. This may mean reaching out in marketing and advertising material (legal within North America for instance, as opposed to much of the EU) to remind consumers to “check the label” or “pop the seal” or whatever other method a manufacturer uses to thwart counterfeiters and embrace traceability. MACHINERY AND EQUIPMENT 16 Pharma Business International www.pbiforum.net © stock.adobe.com/Mike Mareen More than a machine More than a machine Pharma Business International 17 www.pbiforum.net MACHINERY AND EQUIPMENT T he quality production of medications and other pharmaceuticals depends on how well you monitor and control processes. This close eye is what keeps them safe and reliable, as well as consistently effective for the mass market. However, the focus and attention to detail needed for this task, especially on a large scale, inevitably becomes difficult to manage with manual solutions or human labour. To make sure your laboratory procedure, manufacturing practice and beyond meet the exacting standards enforced by the industry, automation is often – if not always – an essential tool for supervising your products in the making every step of the way. The primary focus of automation is often on manufacturing and packaging, with the goal of optimising a factory floor to produce products faster, with a higher degree of accuracy, and with reduced risks of problems involving contaminants, hygiene and/or other issues. Quality is often less of a concern given that all products should be expected to be of heightened quality when properly automated and assuming correct control and ingredients. One of the most important methods by which to optimise automation is to understand that the process is more than just the machinery involved, and much more about the processes that tie it Automation is about more than replacing human workers with machines – it is about achieving more than humans ever could and creating new opportunities for the company because of it. 18 ÁMACHINERY AND EQUIPMENT 18 Pharma Business International www.pbiforum.net together. In many cases, this refers to software systems. Digital control of processes at every stage of the process allows for rapid monitoring, identification of problems action to address such. Industry 4.0 (also known as the fourth industrial revolution) has taken too long to be adopted by many, faced in no small part by resistance from labour groups, unions, but also governments not wanting to face the losses of jobs implied by such a change. When it was first introduced, manufacturers saw Industry 4.0 only as a means of raising productivity by the number of products handled or sorted, and with a reduction in labour. What many did not realise, and which some still do not, is that it is an opportunity to invent or reinvent their offerings and strengthen their competitive position. One need only look at China, long considered a manufacturer of cheap knock-off products, rising up through automation to challenge many other economies. Proper automation also goes hand in hand with traceability, which is another such offering that companies investing in proper automation, including data transfer, can find. When products are monitored at all times through machine process, with information and serial numbers logged, any problems can be traced back through the whole system, and recalls can be issued to the specific locations the drugs went to, rather than to the entire market. Not only does this save costs involved with recalls, but it allows for quick responses that can help to alleviate concern and avoid negative coverage and scandal. For example, mix ups in hand-offs are a large disruptor, especially when drugs have specific shipping requirements. For example, many vaccines must be kept refrigerated at a specific temperature throughout their journey, and if this isn’t communicated, it can render a whole batch unusable. Fully integrated and automated ingredient to consumer batch Pharma Business International 19 www.pbiforum.net MACHINERY AND EQUIPMENT tracking using barcoding, RFID tagging, or IoT temperature logging and timestamping significantly reduces the chance of these mix-ups. This carries on to a reduction in safety stock among pharmaceutical companies – as reduced errors and disruptions to a process mean less safety stock required. In 2021, in the heart of the pandemic, the pharmaceutical sector saw a staggering 71% increase in supply chain disruption. This was obviously an isolated incident due to heightened demand and a worldwide pandemic scenario, but it does highlight the risks involved, and the staggering cost of mistakes. These disruptions are far less likely to happen when a robust and optimised automation process is involved – one which specifically makes use of IoT, scanning, vision control, serialisation and more, and doesn’t just work on the barebones concept of performing the routine movements that a human operative would. When looking at automation, the focus must not only be on replacing the human element for the sake of avoiding labour costs, but on expanding the responsibilities of the machine – because a machine can multi-task and handle more than a human could. It is wasteful to only consider the requirements, when there are greater opportunities to optimise in ways that will surpass a human controller by ten times or more. © stock.adobe.com/unlimit3d © stock.adobe.com/GorodenkoffNext >