A specialty drugs business set up by one of Scotland's most experienced sector veterans is expanding into dermatology as it seeks to become a pan-European pharmaceutical provider.
Edinburgh-based Kelso Pharma has concluded a deal to acquire two products already approved for use in the UK in the prescription treatment of actinic keratoses and plaque psoriasis, both of which result in inflamed and scaly patches of skin. The drugs have been purchased for an undisclosed sum from an organisation within German pharmaceutical manufacturing group Dermapharm.
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Set up in 2020 by chief executive Tom Stratford, Kelso Pharma is backed by Apposite Capital, a private equity firm that specialises in investment in small and medium-sized healthcare businesses. The company and its private equity partner are looking to grow the business through the acquisition of businesses and products "that improve the lives of patients in a cost-effective and ethical manner".
“This exciting acquisition signifies another important milestone, not just for our team at Kelso Pharma, but most importantly for patients," Mr Stratford said. "Launching into the specialty of dermatology allows us to reach more patients across a number of regions as we continue to grow our business.
“Our team continues to work hard to create collaborative partnerships and identify further potential opportunities to expand our portfolio.”
Mr Stratford previously headed up Borders-based ProStrakan and became chief executive of Kyowa Kirin International (KKI) when its parent company, Kyowa Kirin, took over ProStrakan in 2011. He spent his last 16 months working for Kirin in the United States, returning to Scotland in March 2020 at the outset of the Covid pandemic.
In January 2022 Kelso completed its first acquisition, a multi-million pound deal to take over Glasgow-based Stirling Anglian Pharmaceuticals (SAP) to create "a springboard for future sales growth".
At that time SAP had three medicines in the UK healthcare market generating annual revenues of between £10m and £20m. They included a laxative, an anti-inflammatory drug, and a vitamin supplement that were said to fit in with Kelso’s focus on cost-effective medicines of proven benefit to patients.
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SAP added a fourth treatment with the launch earlier this year of Acepiro, which is used in the management of chronic obstructive airways disease.
Speaking to The Herald at the time of the SAP acquisition, Mr Stratford outlined the plan to grow Kelso over the coming five years.
“We haven’t got a defined number really, but there is certainly the expectation of doing another three or four deals of reasonably significant size,” he said. “Apposite were keen not to put a ceiling on the aspiration and I think the view was that if an idea was a very good idea, it could be funded in lots of different ways."
Established in 2006 and headquartered in London, Apposite Capital focuses solely on healthcare. It currently has a portfolio of 13 companies in the UK and Europe operating in the fields of healthcare provision, digital health, medical devices and equipment, diagnostics, pharmaceuticals, pharmaceutical services, and life sciences tools.
Mr Stratford has been joined at Kelso by former KKI chief financial officer Allan Watson and former KKI general counsel Andrew McLean.
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