Recipharm, a contract development and manufacturing organisation (CDMO) based in Sweden, has completed the acquisition of OnTarget Chemistry, also based in Uppsala, Sweden. OnTarget Chemistry is a growing CRO specialized in medicinal chemistry offering synthesis and analytical services.

With the acquisition of OnTarget Chemistry, Recipharm will significantly broaden its pharmaceutical development capabilities. The inclusion of preclinical chemistry services will give Recipharm the possibility to engage much earlier in high potential customer projects. Furthermore, OnTarget Chemistry’s synthesis capabilities will be of great value for the GMP development of APIs in Recipharm’s Italian subsidiary, Edmond Pharma.

Sales in 2015 show more than 60% of total revenue outside Sweden with substantial sales in Germany, Japan and the U.K. The business is profitable and the acquisition is expected to be accretive to EPS from 2016.

Fredrik Lehmann, CEO of OnTarget Chemistry, said, “The fit with Recipharm’s development organization is very good for us. We believe we can add preclinical competence and capabilities to Recipharm and we also look forward to contributing with a broad range of both local and international customers. This will be a great opportunity for us to continue to grow our business within Recipharm.”

The purchase price was $1.8 million, of which 50% is paid in cash and the remaining 50% is paid through an issue in kind of 45.838 series B shares in Recipharm.