A faster new product pathway

BOCA RATON, Fla.—Targeted toward creating a faster and optimal new drug product pathway in this age of COVID-19, LGM Pharma has acquired the formulation development and drug product contract manufacturing business of Nexgen Pharma Inc., thus merging LGM Pharma’s global active pharmaceutical ingredient (API) sourcing, distribution and supply chain management with Nexgen’s contract development and manufacturing organization (CDMO) services.

LGM is currently “providing several APIs through our supply chain services to pharmacy compounding customers that are directly related to treating COVID-19 patients,” LGM Pharma CEO Prasad Raje tells DDN. “Also, we are supplying APIs to several clients that have drug products under development to treat COVID-19 patients.”

The combined companies—which will operate under the name LGM Pharma—contain the capabilities needed to help pharmaceutical and biotechnology customers accelerate and optimize the new product pathway from early R&D and clinical development through manufacturing, regulatory submission, commercialization and distribution.

“This is a transformational acquisition that allows us to greatly expand the services we provide to a substantially enlarged customer base,” Raje says. “As part of our continued growth and diversification strategy, LGM is committed to significant investment in both infrastructure and personnel as part of this acquisition. And with the current challenges facing the industry, the timing for adding U.S.-based drug product manufacturing capacity to LGM is ideal.

“Our complementary pharmaceutical capabilities and shared commitment to innovation, quality and customer service will drive a vibrant and growing business that sets new standards for leadership in the pharmaceutical sector.”

“Since New Harbor Capital’s investment in LGM Pharma back in November 2017, it has been a long-term strategy for LGM to acquire manufacturing assets in the drug substance and drug product manufacturing space,” Raje says.

The merger “was a mutually beneficial acquisition,” Raje adds. No financial details were made available.

“The Nexgen Pharma acquisition has been in process for approximately one year, so the current challenges facing the pharma manufacturing industry and the push to ‘reshore’ API/drug product manufacturing simply made this acquisition a stronger strategic fit for LGM,” he explains. “Especially since this acquisition brings development and commercial manufacturing expertise with a successful record of having launched many commercial products.”

According to Raje, “If not the first, we are one of the very few supply chain companies to acquire manufacturing assets to offer a wider array of services to our combined customer base. This allows our customers to partner smart with LGM—providing CDMO and complete supply chain management capabilities, including drug substance sourcing.”

He notes that LGM Pharma “brings expertise in API sourcing and supply chain management, while Nexgen Pharma contributes expertise in formulation development and manufacturing, and both companies have proven experience in regulatory submissions.”

“The current acquisition does offer services for drug development and commercial launch of drug products in the area of solid dosage, semi-solids and non-sterile liquids,” Raje adds. “As we have a significant customer base in the compounding pharmacy segment, they will be better served since we will start offering analytical testing capabilities that they have typically relied on from third parties.”

Long-term, LGM will “look for further acquisitions in the area of sterile fill-finish drug products, drug substance manufacturing and analytical testing for small and large molecules,” Raje says. “Additional areas we will explore include novel drug delivery technologies, API development and manufacturing, and API particle engineering.”

Going forward, Raje tells DDN that “Our top priority is to ensure a successful integration between the different business units that are part of LGM Pharma now, as the synergies of the combined organization will offer significant benefits to the combined customer base, and ultimately patients. We want our clients to know that by partnering with LGM, they have expanded their drug development teams and will have faster timelines to market, making them more successful.

“We do not intend to be ‘everything to everyone,’ but the services we offer to our customers will be best-in-class.”

Kyle Brown, CEO of Nexgen Pharma, remarks, “We are proud of the pharmaceutical CDMO business our family and talented employees built over many years and are delighted the business has been acquired by LGM Pharma, which is an ideal partner to carry on our tradition of quality and service while expanding the range of capabilities and services for our respective customers. This divestiture will allow us to focus on our other healthcare segments while our pharmaceutical CDMO employees and facilities become part of a highly supportive and synergistic organization.”

The acquisition brings Nexgen’s manufacturing and warehouse distribution facilities and employees in California and Texas to LGM Pharma, along with its formulation development, laboratory and pilot plant manufacturing employees and facilities in Colorado.

In all, LGM Pharma is gaining 150 experienced employees and more than 100,000 square feet of fully equipped facilities, along with expertise in all aspects of pharmaceutical finished product development and manufacturing. The combined customer base will gain access to an expanded scope of regulatory services now available at LGM Pharma, including assisting with CMC requirements and filings and providing support for ANDA and NDA submissions.