Suven Pharmaceuticals shares jump over 5% after acquiring Sapala Organics

Shares of Suven Pharmaceuticals surged over 5% on Friday morning following the company’s announcement of acquiring Hyderabad-based CDMO firm Sapala Organics. The share price opened at ₹695, up from the previous close of ₹667.95, and climbed further to ₹705 on the NSE.

Suven Pharmaceuticals revealed on Thursday post-market hours that it has signed definitive agreements to acquire 100% equity shares of Sapala Organics Private Limited. This move marks a significant expansion in Suven’s capabilities and market reach.

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As of 12:04 PM, Suven Pharmaceuticals’ shares were trading 4.73% higher at ₹699.55 on the NSE.

Sapala Organics, a contract development and manufacturing organization (CDMO), specializes in Oligo drugs and nucleic acid building blocks, including Phosphoramidites, Nucleosides, drug delivery compounds, and Pseudouridine. In FY24, Sapala Organics reported sales of ₹67 crore with an impressive EBITDA margin of over 45%.

The company has a strong customer base across the US, European Union, and Japan, partnering with clients on their New Chemical Entity (NCE) programs throughout the project lifecycle. Notably, sales from Japan accounted for about 20% of Sapala’s revenue from FY21 to FY24.

The market for nucleic acid and Oligo building blocks is expected to grow at a compound annual growth rate (CAGR) of 18-20% over FY24-29, reaching $1800 million.

This acquisition aligns with Suven Pharmaceuticals’ strategy to enhance its presence in the global CDMO market and leverage the growing demand for specialized pharmaceutical ingredients.