Catalent Buys Pharmatek and Lands Spray Drying Technology

The latest M&A news comes from Catalent (NYSE:CTLT), a mid cap company that provides drug delivery and development technologies to the biotech and pharmaceutical sector. Catalent announced on September 13, 2016 that it will acquire Pharmatek Laboratories—and with it, an increasingly important tool for drug manufacturing: spray drying.
“Combined with Catalent’s existing technologies and network, the addition of Pharmatek’s well-established scientific expertise and spray dry capabilities will create an unparalleled drug development platform,” says Barry Littlejohns, President of Catalent’s Drug Delivery Solutions division.

Said spray dry technology should be a big asset for Catalent. The process allows for the production of inhalable drugs and dry pharmaceutical powders by swiftly drying liquid materials with hot air and an atomizer.
It therefore enables companies to work with materials and drugs that have poor water solubility—opening up plenty of possibilities for development. Moreover, the one-step process is easily scalable and can boost production efficiency while lowering costs. As such, it is useful to drug manufacturers—Catalent’s clients.
Several competitors in the space have made similar moves to acquire or scale their spray drying capabilities in recent years. Capsugel installed its first commercial spray dryer in 2014, for example. This past May, Juniper Pharma (NASDAQ:JNP) invested in a PSD-1 spray dryer, which can support later stage clinical trials.
Pharmatek scaled up its own spray drying capabilities in June of this year. According to the press release, the company purchased an additional GEA Niro Mobile Minor, as well as one ProCepT 4M8-Trix and a GEA Niro SD Micro. That equipment will soon belong to Catalent.
The companies expect to close the deal in the weeks to come. Financial details have not yet been released.
News of the acquisition follows on the heels of several other noteworthy buy-outs in the life science sector, from Horizon’s (NASDAQ:HZNP) takeover of Raptor (NASDAQ:RPTP) to the $14 billion Pfizer (NYSE:PFE) / Medivation (NASDAQ:MDVN) deal.
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Securities Disclosure: I, Chelsea Pratt, hold no direct investment interest in any company mentioned in this article.