Private Equity Firms Invest in PCI Pharma Services, Valuing Company at $10 Billion

In a significant move within the pharmaceutical industry, a group of private equity firms has made a substantial investment in PCI Pharma Services, a contract drug development and manufacturing organization (CDMO). The deal, announced on Monday, values PCI at an impressive $10 billion, according to The Wall Street Journal, and signals strong confidence in the company's growth potential.

Investment Details and Company Valuation

Bain Capital and existing lead private equity backer Kohlberg Kravis Roberts & Co. (KKR) have made an unspecified investment in PCI Pharma Services. This funding was bolstered by a "significant reinvestment" from current backer Mubadala Investment Co. Additionally, Partners Group, another existing equity holder, is making a minority investment in the company.

The $10 billion valuation represents a significant increase in PCI's worth since its last major transaction in 2020, when Mubadala acquired a majority stake from Partners Group. According to reports, PCI has more than doubled in size since then, with its employee count now approaching 8,000.

Expansion Plans and Strategic Focus

PCI Pharma Services intends to use the new funds to expand its geographic reach and enhance its capabilities in specialized medicine manufacturing. Key areas of focus include:

1. Increasing capacity for manufacturing specialized medicines
2. Expanding "fill-finish" facilities for injectable therapies
3. Boosting investments in U.S. drug production

The company currently operates 30 sites across Australia, Canada, North America, the UK, and Europe. Earlier this year, PCI acquired a facility in San Diego and is repurposing an existing campus in Bedford, N.H., into a "center of excellence" for producing a wide range of small molecules and biologic drugs, including protein-degrading "PROTACs" and antibody-drug conjugates.

PCI's Market Position and Recent Achievements

PCI Pharma Services has established itself as a significant player in the pharmaceutical industry, boasting involvement in more than 450 product launches over the past five years. Notably, the company reportedly played a role in the production of Novo Nordisk's popular weight loss drug, Wegovy.

CEO Salim Haffar emphasized the company's strategic direction, stating that PCI has "embarked on a purposeful journey to transform itself into a global CDMO."

This investment by private equity firms, particularly Bain Capital's involvement, adds to a growing trend of financial backing in the biopharma sector. Bain's life sciences arm has raised over $6 billion since its inception in 2016, supporting more than 70 companies across various stages of development.