Shares of Suven Pharmaceuticals Ltd surged 5% on 14 June after the company announced signing a definitive agreement to acquire a controlling stake in Hyderabad-based Sapala Organic for a total consideration of Rs 229.5 crore in an all-cash deal. 

In an exchange filing, Suven Pharmaceuticals said, “Suven Pharmaceuticals Limited has executed definitive agreements today, i.e. on 13 June, 2024, for acquiring 100 per cent of equity shares (on a fully diluted basis) in Sapala Organics Private Limited.”

The business did clarify, though, that the planned transaction is subject to standard closing conditions.

Annaswamy Vaidheesh, Executive Chairman of Suven Pharmaceuticals, said, “We are delighted to partner with Sapala and believe it is a strong strategic fit. We see massive potential given it’s a niche technology in the rapidly growing space. Nucleic acid-based therapy targets diseases at a genetic level and has the potential to help patients immensely and cure previously incurable conditions.”

Annaswamy added that with this acquisition, the company now has multiple differentiated technology platforms, such as ADCs and Oligos, amongst others. The company will continue to invest both organically and inorganically to build on these further.

Based in Hyderabad, Sapala Organics is a CDMO with expertise in nucleic acid building blocks (Phosphoramidites & Nucleosides), drug delivery chemicals (such as GalNAc), and Pseudouridine, amongst others.

Sapala Organics demonstrated remarkable financial performance in the fiscal year 2023–2024, with revenues exceeding Rs 67 crore and adjusted EBITDA margins above 45%. 

P Yella Reddy, founder of Sapala, said, “We have built Sapala as a unique CDMO player in the oligonucleotides value chain, largely thanks to the highly capable team that I have had the privilege of leading. Sapala has earned the trust of its customers over the last two decades by consistently taking up challenging projects, developing and scaling up highly complex technologies.”

With an integrated focus on medicines and speciality chemicals through CDMO, Suven is the foremost innovator in India. Over the past ten years, the company has grown at a compound annual growth rate (CAGR) of more than 16%, and its EBITDA margins have exceeded 40%. 

Its areas of competence include contract manufacturing of intermediates, APIs, and formulations, as well as custom synthesis, process R&D, scaling up, and production. Remarkably, Suven’s organisation handles innovation for almost 90% of its whole business, proving its dependability and excellence.

It has over 100 ongoing projects and a sizable pipeline of late Phase 2 and Phase 3 compounds.

At 12:52 pm, the shares of Suven Pharma were trading 4.80% higher at Rs 700 on NSE.