RoundTable to sell generic drug co for $565m

Swiss drug giant Novartis has agreed to buy Sabex from RoundTable Healthcare Partners, scoring a 150 percent gross return on its overall investment.

Lake Forest, Illinois-based RoundTable Healthcare Partners has agreed to sell Canadian generic pharmaceutical manufacturer Sabex to Sandoz, a division of Swiss drug company Novartis, for $565 million (€461 million).

According to RoundTable founding partner Lester Knight, with the sale of Montreal-based Sabex, his firm will return about 8.2 times its investors’ original investment to them.

Sabex – which recorded approximately $86 million in revenues for the past 12 months –  manufactures injectable generic drugs, such as morphine, to hospital pharmacies in both the US and Canada. It will be added to Novartis’ Sandoz unit, which is the world’s second-largest generic drug maker.

RoundTable originally invested an undisclosed amount in Sabex in April 2002, about a month after announcing the close of its premier $400 million fund geared toward investments exclusively in the healthcare industry. Knight said RoundTable helped the company double its manufacturing capacity and set up a Lake Forest, Illinois-based subsidiary to funnel drugs in through a US-based distribution channel. The firm also appointed a new Sabex head when its founder decided to retire two years after the investment with RoundTable.

Knight said RoundTable had planned on holding Sabex for three to five years, but ended up accepting Novartis’ offer, which he described as a ‘significant premium.’