SHS invests in Swiss-German specialty drug company Develco Pharma
- Tübingen-based industry investor SHS acquires minority share in formulation specialist Develco Pharma
- Develco specializes in the development, approval and production of innovative and generic specialty drugs and offers a unique and broad set of formulation technologies for orally administered medicines with specific substance-release profiles
- Develco operates a state-of-the-art production facility of its own in Germany
- Equity investment accelerates the development of new medicines
Tübingen-based SHS Gesellschaft für Beteiligungsmanagement mbH is investing from its SHS V fund in the Swiss-German specialty drug company Develco Pharma. Founded in 2006 and now with more than 120 employees, the company operates in Switzerland and Schopfheim, Germany, developing and manufacturing orally administered medicines containing known active ingredients in formulations that offer delayed or modified release of active ingredients. Develco has state-of-the-art production operations of its own; its customers include world-leading pharmaceuticals companies that market the products internationally.
Orally administered, prolonged-release medicinal products: an attractive growth field
“The development of orally administered medicines with sustained-delivery dosage forms is a demanding, dynamic and interdisciplinary field of work with very good prospects for growth,” Hubertus Leonhardt, Managing Partner at SHS, remarked about the investment. “We are delighted at the opportunity to work with the management at Develco.”
Medicines of the kind Develco Pharma has been developing and manufacturing since 2006 typically link a proven, approved active ingredient with a formulation that permits a modified or delayed release of that active ingredient: One example of this is the painkiller that is taken once in the morning and releases its active ingredient slowly and in a controlled manner over the course of the day. This is better for the patient – and it also improves compliance with prescribed dosages. Develco Pharma has earned an excellent reputation as a developer and producer in this field over the past 14 years.
“With a skilled and highly motivated team working under the direction of Board of Directors Head Dr. Mathias Scheer and CEO Dr. Martin Renner, Develco Pharma has occupied a very attractive and profitable niche. The team has a great deal of expertise and experience in the field of oral drug-delivery systems. This is also reflected in the company’s roster of customers,” according to Manfred Ulmer-Weber, who will join the Develco Board of Directors on behalf of Tübingen-based industry investor SHS.
Successful in the niche
Develco was established in 2006 by Dr. Mathias Scheer and the late Dr. Dirk Kramer. Other members of management who are still active to this day joined the firm immediately thereafter and hold the majority of the company’s shares. The company has locations in Stansstad and Pratteln in Switzerland, and in Schopfheim, in the Baden region of Germany, where a production operation was launched in 2016. Some 200 million analgesics are currently manufactured for the global market there – with considerable potential for expansion. Experts at Develco estimate a market volume for strong analgesics (narcotics) of some 500 million tablets per year in Germany alone.
Develco co-founder and Board of Directors Head Dr. Mathias Scheer is very pleased with the entry of SHS: “We are happy that we have found an experienced industry investor in SHS, a partner that will devote its expertise and network toward realizing our plans for growth.” The Develco CEO, Dr. Martin Renner, is also very optimistic: “We are currently broadening our pipeline so we can use our expertise to advance into new therapeutic fields, also with potential new partners we are looking for. With SHS on board, we can now push ahead with this effort even more vigorously. We are proud to have gained a partner of the calibre of SHS.”
A logical addition to the SHS portfolio
As part of the capital increase, Tübingen-based SHS will gain a minority share and be active in the Board of Directors. Other senior managers at Develco are taking part in the capital measure as well.
For SHS Partner and Managing Director Hubertus Leonhardt, the investment in the innovative medium-sized company is a logical addition to the existing SHS portfolio in the current fund generation V: “We also invested in companies in this sector during the two previous fund generations, SHS III and SHS IV.”
During the coming quarters, as fund generation V goes forward at SHS, the Tübingen-based equity investor aims to acquire further minority and majority shares in the fields of medical technology, diagnostics, drug delivery, CDMO and life sciences tools.
About SHS Gesellschaft für Beteiligungsmanagement mbH:
SHS Gesellschaft für Beteiligungsmanagement is based in Tübingen, Germany and invests in medical technology and life science companies with a focus on expansion financing, changes in shareholder structures and successor situations. SHS holds minority as well as majority interests. The company was founded in 1993 and has since gained extensive experience as an industry investor, which supports the growth of its portfolio companies through a network of partnerships regarding the introduction of new products, regulatory issues or entering new markets. German and international investors in the SHS funds include stakeholders such as professional pension insurers, retirement funds, strategic investors, funds of funds, family offices, entrepreneurs and the SHS management team. The equity investment of the AIFM-registered company totals to up to €30 million, and volumes in excess of this amount can be implemented with a network of co-investors. SHS is currently investing from its fifth fund. The fund has received capital commitments of more than €130 million. Further information: www.shs-capital.eu
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SHS Gesellschaft für Beteiligungsmanagement mbH
72072 Tübingen, Germany
Tel.: +49 (0)172/8061014
About Develco Pharma:
With headquarters in Pratteln, Switzerland, Develco Pharma is a Swiss-German pharmaceutical company specializing in the development and manufacture of orally administered, prolonged-release drugs containing known active ingredients. Established in 2006, today the company has a workforce of 125 employees. In Germany, a state-of-the-art production facility for analgesics has been in operation in Schopfheim, in the Baden region, since 2016. Develco identifies and defines pharmaceutical products containing known active ingredients and develops generic and innovative formulations for the delayed or modified release of active ingredients. On the strength of its experience and innovativeness, the company has emerged as an internationally recognized provider of pharmaceuticals for the treatment of severe pain. The customer base of Develco Pharma includes global pharmaceuticals groups. The company has some 180 market approvals in all (products of different dosages) in Europe, the US, Asia and Australia. For further information, go to: www.develco.ch