Suven Pharmaceuticals has agreed to acquire Hyderabad, India-based contract research development organisation (CDMO) Sapala Organics.

Sapala Organics focuses on oligo drugs and nucleic acid building blocks such as Phosphoramidites & Nucleosides, drug delivery compounds, Pseudouridine, and others.

The company has expertise across a wide spectrum of specialised building blocks. It also has a presence in Japan through an affiliate entity.

With clients that include pharmaceutical companies, CDMOs, and diagnostic firms, Sapala plays a crucial role as a partner in their Oligo drug NCE programmes.

Suven Pharmaceuticals executive chairman Annaswamy Vaidheesh said: “We are delighted to partner with Sapala and believe it is a strong strategic fit. We see massive potential given it’s a niche technology in the rapidly growing space.

“Nucleic acid based therapy targets diseases at a genetic level and has the potential to help patients immensely and cure previously incurable conditions.

“With this acquisition, we now have multiple differentiated technology platforms such as ADCs and Oligos amongst others. We will continue to invest both organically and inorganically to further build on these.”

Under the deal, Suven will initially acquire a 67.5% equity stake in Sapala via secondary transfer from its existing shareholders in the Q2 of the financial year 2024-2025, contingent upon the fulfilment of customary closing conditions. This is equal to 51% of the share capital of the CDMO on a fully diluted basis.

As agreed, Suven will pay INR2.295bn ($27.47m) as consideration for the majority stake, subject to certain adjustments.

Subsequently, the company will acquire the remaining equity stake after the financial year 2026-2027, subject to the fulfilment of customary closing conditions.

Upon completion, the company will possess 100% ownership of the share capital of the Sapala Organics on a fully diluted basis.

Sapala founder P Yella Reddy said: “Sapala has earned the trust of its customers over the last two decades by consistently taking up challenging projects, developing and scaling up highly complex technologies.

“A strategic partner like Suven, with its wider reach and resources will help to take Sapala to the next level while providing significant growth and development opportunities for Sapala’s employees as well.”

The transaction is subject to customary closing conditions. Steadmount Capital Advisors and Banyan Advisory served as advisors to Sapala throughout the deal.