The deal covers a 900-person group at 3M that provides biopharma companies with development and manufacturing services involving inhalation, transdermal, microneedle and conventional drug delivery technologies. 3M is keeping hold of its transdermal drug delivery components business.
3M calculates the divested business generated revenues of around $380m (€341m) last year.
Altaris Capital Partners is set to pay around $650m to take control of the group. 3M will receive that amount in a mix of cash, an interest-bearing security and a 17% non-controlling stake in the company created through the divestiture.
The deal renews Altaris’ interest in biopharma-focused contract development and manufacturing organisations (CDMOs). In 2008, Altaris helped OsoBio, then known as Oso Biopharmaceuticals Manufacturing, buy a sterile injectables manufacturing business from Catalent. Six years later, AMRI bought OsoBio for $110m.
Despite that exit, Altaris has been more active in the medtech contract services sector, buying, and in some cases selling, stakes in companies including CI Medical Technologies, Minnetronix and Paramit.
The assets Altaris is set to acquire from 3M straddle the line between the drug and medtech sectors. The 3M unit services pharma and biotech companies using its medtech assets and expertise.
Specifically, the 3M unit provides technologies such as metred dose inhalers and aerosol nasal drug delivery devices and offers associated inhalation contract manufacturing services.
3M’s inhalation contract manufacturing service spans four sites in Argentina, California, Minnesota and the UK. Between them, the sites have cold-fill and pressure-fill capabilities and can handle work from pilot projects up to large batch commercial-scale production.
The sites in California and Minnesota also provide transdermal manufacturing services in support of 3M’s microneedle and patch-based drug delivery technologies.
3M’s unit has faced some headwinds this year, driving a mid-single-digit drop in sales in the second quarter. However, performance picked up slightly in the third quarter and 3M predicted the upward sequential improvement will continue in its upcoming financials.
Ultimate responsibility for maintaining the positive momentum will soon fall on a new owner. Altaris is expected to close the acquisition of the assets in the first half of next year.