‘This is game changing for us,’ says US firm, Pharmgate, as it buys medicated feed additive producer
‘The acquisition represents a real game changer for us. We have essentially gone from being an active pharma ingredients (API) producer to a fully-fledged animal health company,’ Colin Gray, CEO of Pharmgate, told feednavigator today.
The move sees it take over Pennfield's manufacturing and laboratory facilities as well as its sales and marketing operations in Nebraska.
Gray said the timing was right in respect of Pennfield’s growth, with the feed additive company long viewed as a potential takeover target by other market players: “It has some good pipeline projects, and we have acquired 19 active files in this deal.”
Pharmgate is a subsidiary of Jinhe Biotechnology of China, a manufacturer of chlortetracycline feed grade, chlortetracycline hydrochloride, salinomycin and other animal health compounds.
It was established in 2008 to enable its parent company access the feed and animal production industry in the US, Canada, Mexico, Latin America and Europe.
Joint venture in medicated feed
The CEO said the acquisition gives Pharmgate a strong base from which to continue its growth in the medicated feed additive and water soluble product sectors. Four years ago saw it enter a tie-up with UK antibiotics maker, Eco Animal Health, resulting in the establishment of the jointly owned Pharmgate Animal Health, with a focus on the North American market.
The acquisition of Pennfield also strengthens the New Jersey company's presence in Latin American markets, which Gray said offer opportunities but also plenty of challenges in terms of short-term gains: "These are big markets but also undisciplined ones, with an approach to regulatory oversight that differs somewhat from North America and Europe. There is a lot of competition from other medicated feed players, in addition to a lot of generics and price wars. But we didn't expect quick turnarounds - we are there for the long haul."
When asked about the impact of the US Food and Drug Administration (FDA)’s move to get drug companies to voluntarily remove growth enhancement and feed efficiency indications from the approved uses of their medically important antimicrobials such as chlortetracycline by 2017, the CEO said he expects little market disruption.
“We forecast only a 3 to 5% reduction in overall volume of these products as a result of the FDA action,” said Gray.
Once manufacturers voluntarily make the changes requested by the agency, the affected antibiotics can then only be used in food-producing animals to treat, prevent or control disease under the order of or by prescription from a licensed veterinarian.
