Suven Pharma and Cohance Merge for Contract Drug Manufacturing

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Indian contract drug manufacturer Suven Pharmaceuticals (SUVH.NS) opened a new tab and said it merged with Chance Lifesciences on Thursday in an all-share deal as it looks to scale up its contract and development manufacturing services (CDMO) business further.

Under the deal, all shareholders of privately held Cohance will be issued 11 shares of Suven for every 295 of Cohance based on the swap ratio, Suven said on Thursday.

Private equity firm Advent International wholly owns Cohance. It has a significant stake in Suven Pharma, which was demerged from its parent entity, Suven Life Sciences (SUVP.NS), and opened a new tab in 2020.

The company said that the combined entity, which Advent has been looking to merge since 2022, will be 66.7% owned by Advent's entities, and public shareholders will hold the remaining 33.3%.

The merged platform will comprise three distinct business units that contract drug manufacturing of pharmaceuticals, specialty chemicals, and active pharmaceutical ingredients (API), key elements added to drugs to produce desired health effects.

"Cohance's addition, particularly its fast-growing ADC (antibody-drug conjugates used in treating cancer) platform, reinforces our position as a leading CDMO platform," Suven said.

The addition of Cohance's API business will scale up Suven's formulation business, according to the company.

India's contract drug manufacturers are seeing a boost in their business as global pharmaceutical companies seek services outside China to diversify their supply chain.

"The proposed merger is expected to be double-digit EPS accretive (without synergies) from its first year being effective," Suven said.

The company said the transaction will conclude over the next 12-15 months, subject to shareholder regulatory approvals.