Irish pharma firms provide shot in the arm for investors

The Irish pharma sector is continuing to grow in Ireland and is providing opportunities for investment at all levels – from megadeals to seed funding.

When Dublin-based Jazz Pharmaceuticals announced its intention to buy UK rival GW pharmaceuticals plc for $7.2 billion (€6.07 billion) in February [investor.jazzpharma.com/news-releases/news-release-details/jazz-pharmaceuticals-acquire-gw-pharmaceuticals-plc-creating], it marked one of the largest M&A deals to be completed in Ireland for some time, and a sign that the economy was starting to return to something like normal after the COVID-19 pandemic had severely impacted dealmaking in 2020.

Jazz is a leader in sleep medicines and has a growing presence in the oncology sector. This deal expands Jazz’s neuroscience portfolio – GW has long-standing expertise in developing cannabinoid-based products – and, it is hoped, will drive sustainable, long-term opportunities to create value, according to Bruce Cozadd, chairman and CEO of Jazz Pharmaceuticals.

“We are joining two teams that share a passion for, and track record of, developing differentiated therapies that advance science and transform the lives of patients,” Cozadd aded. “This will help facilitate a successful integration and bring added capabilities to Jazz. Given the strength of our balance sheet and the meaningful financial drivers of the transaction, we are confident in the value we can deliver to both companies’ shareholders and patients.”

Justin Gover, CEO of GW Pharmaceuticals, added: “We believe that Jazz is an ideal growth partner that is committed to supporting our commercial efforts, as well as ongoing clinical and research programs. We have a shared vision of developing and commercializing innovative medicines that address significant unmet needs in neuroscience and an approach of putting patients first.”

Long-standing growth

Pharmaceuticals has been a growth sector in Ireland for years and many of the world’s top pharma companies have a base in the country including Roche, Pfizer and Sanofi. Pharma makes a significant contribution to Ireland’s economy; Ireland is the largest net exporter of pharmaceuticals in the EU accounting for over 50% of all exports from the country, according to the Irish Pharmaceutical Healthcare Association.www.ipha.ie/about-the-industry/contribution-to-the-irish-economy/

The sector weathered the COVID-19 storm well – as you would expect, there was no downturn in demand for pharmaceuticals – and is now growing quickly again as the Irish economy heads back towards pre-pandemic growth levels.

Investment

A signal of the confidence in the Irish pharmaceuticals market is that companies are starting to invest in growth again. For example, APC Ltd, a pharmaceutical research and development company, announced in June that it plans to invest €25 million to create a ‘Global Centre of Excellence for Vaccine and Advanced Therapeutic Research and Manufacturing’.

The investment was split into two parts. The first saw €8 million spent on adding 12,000 sq ft of laboratory space and research infrastructure at APC’s headquarters in Dublin. This added 50 skilled jobs in fields including biology and chemical engineering to the existing workforce of 140. This expansion aimed to help accelerate research into COVID-19 vaccines and other advanced therapeutics, according to the company.

The second part of the investment will see €17 million spent on creating VLE Therapeutics Ltd, which will manufacture vaccines and other therapeutics including gene therapies. APC says this will be the first Irish-owned facility of its type to provide a local supply chain for these medicines. It is anticipated that a manufacturing facility will be ready by the close of this year, employing 70 people in all, with capacity to manufacture up to 50 million vaccine doses per year.

This will be followed by the construction of a new 80,000 sq ft manufacturing facility before 2024, which will be able to produce hundreds of millions of doses of vaccines and advanced therapeutics per year.

Enterprise Ireland, the government organisation responsible for the development and growth of Irish enterprises in world markets, provided some of the funds for APC’s plans.

Taoiseach Michael Martin said at the announcement: “The fact that this is all happening in Ireland, thanks to the work of a 100% Irish-owned company, is testament to the wealth of talent and vision we have here in this country in the biotech and pharmaceutical space. It is remarkable to think that, thanks to APC and VLE, Ireland will shortly have the capacity to manufacture hundreds of millions of vaccine doses a year, a move that is set to be totally transformative not just for patients, but for the entire sector, at both a domestic and international level.”

Overseas choice

Meanwhile, overseas businesses are still choosing Ireland as a base for their EMEA operations. In July, Medable Inc, a US-based provider of cloud platform for patient-centred drug development, which helps to make clinical trials decentralised and accessible to anyone, helping therapies to reach market sooner, confirmed that it plans to open its new EMEA headquarters in Dublin.

The move, which is expected to create up to 50 jobs in the coming three years, is part of Medable’s ambitious European expansion plans. The move was supported by IDA Ireland, Ireland’s inward investment company.

Medable already has a presence in various European countries, but this move to Dublin will help the company to expand its sales and software development, enabling it to continue broad adoption of digital clinical trials at global scale.

The aim is to enable Medable to work with biotech, pharma and medical device companies in Central Europe and support clinical trials by giving remote and site-based access to patients.

“This expansion is the result of multiple country analyses, and we believe the Ireland location and Dublin office is an optimal first step in our international growth plan,” said Burak Over, head of corporate development and investor relations for Medable.

Investing in Irish pharmaceutical companies

Medable’s move to Dublin highlights some of the reasons why Ireland is such a highly regarded country to base operations in.

For instance, Ireland’s university sector is renowned for its research into pharmaceuticals, and many spin-out companies have been established over the years from that from universities around the country. For instance, there is Inthelia Therapeutics, which was spun out from RCSI. Inthelia is looking to develop therapies to support people to recover from, or prevent their death from, pathogen-induced endothelial dysfunction and infection, including sepsis and septic shock.

Currently, Inthelia is in the process of raising €22 million, which will be used to build its team and complete a phase 2a clinical trial in sepsis patients.

As with Inthelia, many of these businesses require some form of outside investment to be able to commercialise their research to their full potential.

Likewise, they can also provide opportunities for acquisition, again as they seek to attain the next level of growth.

With such a mature sector, it also means there is a well-developed infrastructure around the sector of related and complimentary businesses. In addition, there is support from the government, such as with Medable’s investment in Ireland.

Another reason to invest in Irish pharma companies is that it is part of the European Union and the single market, giving it frictionless trade with the other 26 members of the bloc. As the only native English-speaking member of the EU since the departure of the UK, it has become increasingly attractive to companies in Anglophone nations that may have previously considered the UK as a base, but now don’t want to be encumbered by the additional red tape that trading in Europe involves.

Given these market forces, investing in the pharma sector would seem to be a relatively low-risk investment – although all investments carry some risks, especially early-stage companies developing novel treatments – as the sector is growing consistently and isn’t prone to boom and bust cycles.

Getting advice

For those looking to set up a pharmaceutical business in Ireland, or invest in or acquire an existing company, then it is crucial to get the right advice.

Malone & Co Accountants https://www.maloneaccountants.ie/ can assist on all the relevant aspects from setting up a company to securing grants and fundraising.