Kelix bio, owned by CDC, EBRD, to acquire Morocco’s PHI for $200m

BY: CHARLES ABUEDE

Kelix bio, a pan-African biopharmaceutical platform, has signed an agreement to acquire Pharmaceutical Institute (PHI), a Moroccan-headquartered producer and distributor of generic and therapeutic pharmaceuticals, for up to a $200 million in second round of funding into Kelix bio. This is expected to be concluded in the first quarter of 2022. The deal is subject to regulatory approval.

The funding will be led by Development Partners International (DPI), an investment firm focused on Africa with $2.8 billion in assets under management including co-investments, and CDC Group (CDC), the United Kingdom’s development finance institution that will shortly be renamed British International Investment (BII).

Also, Kelix bio has appointed Sijilmasa Ltd (Amine Rezzouk) as financial advisor, and Naciri & Associés Allen & Overy as legal advisors, while UGGC is legal advisor to the Sedrati family.

Per the proposed acquisition, it will mark Kelix bio’s first entry into Morocco, an important market on the continent, and gateway into the Francophone Africa pharma market, as it accelerates its expansion across the region. It will also enable PHI to expand its existing product range, benefitting from Kelix bio’s research and development capabilities, cross-selling synergies, and economies of scale it will provide.

There is significant demand in Africa for affordable speciality drugs, accessible to underserved communities that need them the most. Kelix bio, a $750 million pan-African buy and build platform established in 2020 by DPI, CDC and the European Bank for Reconstruction and Development (EBRD) in response to this demand.

Since its creation, Kelix bio has seen rapid growth, demonstrated by its annual sales growing by 44 percent in 2021. The acquisition of PHI will be the fourth in two years, reaffirming Kelix’s commitment to Africa.

The latest funding round by DPI and CDC will bring total capital invested to $450 million, which will be supported by an additional $300 million of planned investment over the next two years, as Kelix bio looks to fund its strong pipeline of opportunities, establish new cross-market distribution channels and support research and development of new drugs.

However, PHI, a leading manufacturer and distributor of pharmaceutical products in Morocco, founded by the Sedrati family in 1989, has a strong international partners network and complementary manufacturing capabilities that will support Kelix bio’s strategy to create local ecosystems for production and distribution.

Sofiane Lahmar, partner at DPI commented, “KELIX bio is a game changer that has the potential to transform the African pharmaceutical industry – a sector that has historically been significantly underserved and inaccessible to many.”

Nick O’Donohoe, chief executive of CDC/BII, said: “BII is helping to build productive, sustainable and inclusive economies for the benefit of those that need our capital the most. Providing access to affordable drug treatments is a vital part of that mandate.”

Jerome Silvestre, chairman, Kelix bio, said: “We are pleased to have reached an agreement with Pharmaceutical Institute to join Kelix bio, as we focus on our mission of improving access to affordable specialty drugs across Africa. PHI is a leader in the Moroccan pharmaceutical sector, with excellent manufacturing capabilities and a strong distribution network. We are confident that subject to regulatory approvals, they will be a great addition to KELIX bio and also look forward to a continuing partnership with DPI, CDC and EBRD.”