UK’s publicly-owned impact investor CDC Group has reinforced its commitment to broaden access to live-saving drugs across Africa, with the acquisition of Moroccan pharmaceutical firm by portfolio company KELIX bio
In brief
- KELIX bio is a first of its kind pan-African pharmaceutical platform, established by founding investors CDC, DPI and the EBRD to broaden access to life-saving drugs across the continent.
- Last week, it acquired the Morocco-based Pharmaceutical Institute.
- Subject to regulatory approvals, it will mark the fourth investment by KELIX bio.
- This funding round will take capital invested in KELIX bio to $450 million, with plans for additional investment of $300 million over the next two years to fund further acquisitions.
CDC Group, the UK’s publicly owned impact investor soon to be renamed British International Investment (BII), has just announced an agreement for KELIX bio to acquire Pharmaceutical Institute (PHI), a Moroccan-headquartered producer and distributor of generic and therapeutic pharmaceuticals.
CDC is a key part of the UK government’s wider plans to mobilise up to £8 billion (€9.6bn) a year of public and private sector investment in international projects by 2025.
It is also a major investor in Africa, having invested more than £2.7bn in African businesses over the past three years. As part of this, CDC founded KELIX bio in 2020, together with European Bank for Reconstruction and Development (EBRD) and Development Partners International (DPI), an investment firm focused on Africa.
KELIX bio, is a specialty generic business whose mission is to develop and commercialise complex specialty products in jurisdictions historically deprived from access to such medications. The group says it has an “impact focused strategy” and that “there is significant demand in Africa for affordable speciality drugs, accessible to underserved communities that need them the most”.
Through its ‘buy-and-build’ strategy, KELIX bio has manufacturing operations in India, Egypt and Malta, and markets its products across Africa, and to some extent in Asia, and Latin America.
Yacine Yacoubi, investment manager at CDC, tells Impact Investor: “Morocco is a key market for us. Partially this is because of its size. But also because of its role as a platform to tap into the whole of Francophone West Africa.”
Yacoubi also cites the increased attractiveness of Morocco given the recent announcements of an expansion of universal healthcare there “which amplifies the impact we have”. Once slotted into KELIX, it is intended that the new Moroccan company will expand its existing product range, and benefit from the platform’s “bio research and development capabilities, cross-selling synergies, and economies of scale”.
The acquisition will be financed through a $200 million (€183m) second round of funding into KELIX Bio led by CDC/BII and DPI.
“It’s part of our desire to localise production of high-quality drugs not normally available to those on reduced incomes.”
Yacine Yacoubi, CDC
Asked how this latest acquisition fits into KELIX’s broader strategy, Yacoubi says: “It’s part of our desire to localise production of high-quality drugs not normally available to those on reduced incomes. We are taking IP [intellectual property] and finding ways to make it more widely available. Now that’s ‘impact.’”
Yacoubi outlined how KELIX has followed a strategy of originally acquiring what he calls ‘IP companies’ in India and Malta, then adding ‘market companies’ in Egypt and now Morocco. He says: “We fully intend to look at other interesting IP companies, and other countries. Definitely South Africa and Algeria, but maybe more.”
This round of funding takes the capital available to KELIX up to $450m. But Yacoubi says the target is to eventually reach $750. “This will come in the form of additional capital from the original investors, but also, hopefully, by attracting private capital from impact investors.”
In launching the deal, Nick O’Donohoe, chief executive at 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.”
