January 2, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Privately held pharmaceutical compounding company CutisPharma said in a filing with the U.S. Securities and Exchange Commission this week that it will seek $20 million in equity financing from two investors, rumored to be private equity players Eric Lev and David Parker, both of whom are partners at Wellesley-based Ampersand Capital Partners.
17-year old Cutis has never sought equity financing before but has seen major expansion in the last year, moving into new Wilmington, Mass., headquarters and naming a new president, Neal Muni, to spearhead its commercial efforts and development strategy for its product portfolio.
“[Cutis] has significantly expanded (its) operating infrastructure and capabilities with a move into a new state-of-the-art corporate headquarters that includes facilities for warehousing, distribution and manufacturing,” said the company on its website. It filed the SEC form on Dec. 31.
Ampersand Capital Partners holds a stake in the company and lists it as one of its portfolio firms. Cutis did not issue a statement on the new financing, reported the Boston Business Journal, nor return requests for comment. But the size of the financing has industry watchers wondering if Cutis will soon be a PE-run business, which could include new members on its board that could push for it to look for new suitors or even exit.
Venture capitalists has long coveted the $9 billion-per-year prescription compounding business, even as it received an overhaul from regulators in the last several years after a contaminated vial of medicine killed over 60 people being treated with the drug from the New England Compounding Center in Framingham, Mass.
Prior to that tragedy, most compounding facilities were overseen only very loosely by a patchwork of local and state regulations, which did not closely monitor how the customized drugs were produced.
Cutis itself has not run afoul of the law, and since it was founded in 1998, may be the sort of solid, steady, cash-rich business private equity shops look for as steady earners in a portfolio. New regulations, including a public database the list information on product information from compounding pharmacies, may also have reassured private investors that the sector is a safe bet.
