In 2013, Charterhouse entered a competitive auction to purchase a leading Italian generics company, Doc Generici, from its three industry owners: Zambon, Chiesi and Apotex. Doc operates only in Italy, which means that it is highly exposed to any regulatory or other changes in the Italian market. Charterhouse engaged Pharmacloud alongside other commercial due diligence providers and asked us to address this risk in particular.
As well as working on an assessment of Doc’s supply contracts (the company uses third parties to supply all its products), Pharmacloud’s brief was to provide specific input on the Italian generic pharmaceutical industry. The sustainability of the current Italian pricing model and the relatively low risk that the government would implement further price cuts were two important aspects of the investment thesis, so providing supporting evidence on these points was critical for the go/no-go decision. For this project, Pharmacloud used its knowledge of the Italian market plus its local contacts to produce an analysis of the current Italian pricing model together with a comparison of net and gross generic prices across the main generic pharmaceutical markets in Europe.
Charterhouse announced the purchase of Doc in May 2013, since when Doc has continued to demonstrate very strong growth, while remaining focused on the Italian market.