India-based Suven Pharmaceuticals has announced a definitive agreement to acquire a strategic controlling stake in Sapala Organics.

The acquisition marks a significant expansion of Suven's contract development and manufacturing organisation business into the oligonucleotide sector.

The initial agreement will see Suven acquiring a 67.5% stake through a secondary transfer from the current shareholders of Sapala.

This will equate to a 51% share capital of Sapala on a fully diluted basis.

Post the financial year 2026 to 2027, Suven intends to purchase the remaining shares, ultimately owning 100% of Sapala Organics' share capital on a fully diluted basis.

The total acquisition will cost between 13 and 15 times Sapala’s earnings before interest, taxation, depreciation and amortisation (EBITDA), contingent on the company's financial performance up to 2027.

Sapala, also based in the Indian city of Hyderabad, specialises in the production of oligonucleotide drugs and nucleic acid building blocks, including specialised/modified amidites and nucleosides and drug delivery compounds such as galNAc and pseudouridine.

For the fiscal year 2024, Sapala reported revenue exceeding Rs670m ($8m) with an adjusted EBITDA margin of more than 45%.

Dr P Yella Reddy will maintain his leadership role as CEO of Sapala and join the Suven+Chance platform as a strategic advisor for the Japan region.

Suven executive chairman Annaswamy Vaidheesh stated: “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 [antibody-drug conjugates] and oligos amongst others. We will continue to invest both organically and inorganically to further build on these.”