M&A Spotlight: Quadrupling revenues and expanding internationally at CNX Therapeutics

CNX Therapeutics is well on its way to being a partner of choice for pharma and biotechs looking to commercialise prescription products in Europe. Inflexion facilitated the carve-out of CNX from Sunovian three years ago, since then revenues have quadrupled.  

CNX’s long-term plan is to build a partner of choice prescription-only commercialisation platform for Europe to allow international players – namely from the Americas and Asia – to launch and commercialise their valuable products in a large market with regulatory complexity creating high barriers to entry. Its journey began in 2021 when Inflexion acquired Sunovion Pharmaceuticals Europe Limited, the European operations of US-based Sunovion and supported CNX’s transformation to a standalone entity. Today it is firmly dedicated to the supply of essential medicines focused on either the treatment of central nervous system (CNS) disorders or those treatments where products are supplied through hospitals, (mostly injectables, in complex conditions such as cancer.

Guy Clark joined shortly after CNX’s independence, bringing with him three decades of experience in business development and mergers & acquisitions which saw him launch international strategic partnerships at organisations including IVAX, Glenmark and AMCo/ADVANZ. He is working with his leadership team and Inflexion to realise this strategic ambition through a well-crafted road map and wasted no time in bringing his M&A experience to bear as CNX builds critical mass and capabilities in Western Europe, core foundation stones of the broader strategy.

The first acquisition of niche injectable pharmaceuticals specialist Synchrony Pharma took place in summer 2022. This broadened CNX’s portfolio and moved it beyond its CNS focus into niche hospital products.

Acquisitions aren’t always whole businesses. In the pharma sector, product purchases are also a potential strategy to help boost revenues and diversification of portfolio and market presence. Over the last c. 12 months CNX has acquired four cancer support brands from Clinigen, two CNS brands from global healthcare company Sanofi, and two CNS brands from Eisai. Each of these products were acquired with the aim of adding scale, diversification, new in-region direct capabilities, and laying the foundation needed for CNX to achieve its long-term plan.

“The acquisitions have significantly enhanced and expanded the organisation by creating significant free cashflow to support our growth investments into capability build and also our M&A agenda,” Guy enthuses, citing the acceleration of CNX’s headcount growth from 17 to 50 over the last 18 months and more people planned to join.

Diversification is important for various reasons, not least CNX’s access to capital to support its broader growth agenda. Guy explained that as a new business lacking scale and initially supplying only one product (Latuda), lenders deemed the business too risky. But after the business doubled revenues in the first two years and diversified its portfolio, concentration risk reduced sufficiently to meet with lenders, ultimately securing a favourable acquisition facility from Ares that the business is currently benefitting from.

Guy describes it as a long and arduous process, but credits Inflexion as opening the door. “Without Inflexion’s advice on how to position ourselves, we’d never have got the product or the terms.” The ability to draw on this facility provides liquidity to enable further strategic partnerships and transactions across the pharmaceutical sector to support medicine product development, commercialisation, and distribution for neurological, psychiatric, and specialty hospital products.

Looking ahead

This growth is set to continue. “We’ve been calibrated to date but anticipate refining our operational priorities going forward,” Guy says, stressing they will continue to concentrate on prescription drugs, and CNS will remain one of its core areas of therapeutic focus.

“We’ve committed to an ambitious plan for the next three years, and have a clear pathway to get there,” Guy says, saying they intend to quadruple revenues again through a combination of organic and inorganic growth, as the platform benefits from the commercial infrastructure it has built and its increasing brand recognition within the ecosystem. Going forward, an increasingly important part of the organic growth story will come from in-licensing specialist products and commercialising them in markets CNX has established a direct presence in. “Inflexion understands the importance of investing ahead of growth and their on-the-ground presence in our key markets helps connect us to expert advisers that can plug gaps in what we do and validate our thinking.”

With all its growth plans over the coming years, Guy is confident Inflexion are a highly supportive partner: “They go beyond the pale in terms of getting involved and supporting decision-making when needed, acting as a genuine sparring partner to really come up with solutions. An additional differentiator is their value acceleration team.”

All Inflexion portfolio companies, regardless of size or ownership stake, have full access to our dedicated value acceleration resources covering digital enhancement, international expansion, M&A, sustainability, commercial strategy and talent management. Our M&A expertise has supported more than 480 acquisitions for our portfolio companies, including 100+ international acquisitions across 32 countries.