TopGum Industries, the leading company in the dietary supplements gummy dosage-form market, has signed a binding letter of intent (LOI) to acquire US operations engaged in the manufacture of pharmaceutical products and dietary supplements in gummy dosage form.
The acquired operations represent the first in the world to achieve operational manufacturing capabilities for pharmaceutical-grade gummies containing active pharmaceutical ingredients (APIs).
This transaction constitutes a major strategic leap for TopGum, enabling its entry into the pharmaceutical domain.
The seller is a leading US company engaged in generic pharmaceuticals and a provider of development and manufacturing services in the health products sector, with extensive relationships with leading US retail chains.
The acquired activity incorporates a dedicated US manufacturing facility with active production lines, a laboratory trials line and infrastructure for capacity expansion.
The facility complies with FDA requirements and, subject to a few months' certification process, shall also meet the requirements of the TGA, enabling expansion into the Australian market and additional ones.
Consideration for the acquisition shall include a cash payment of $12m upon closing and the issuance of TopGum's shares to the seller valued at $13m, based on a share price of NIS 13 per share.
The transaction also incorporates contingent future consideration of up to $12m, payable through the issuance of TopGum's shares (subject to meeting certain sales targets).
As part of the LOI, the parties agreed to a long-term strategic collaboration for the commercialisation of TopGum's dietary supplement and pharmaceutical gummy product portfolio.
Furthermore, TopGum committed to act toward the appointment of one director to its board, to be nominated by the seller.
The acquired operations include several pharmaceutical gummy products with launches planned to begin in 2026.
Notably, the seller has entered into an agreement with one of the world's largest pharmaceutical companies for the development of a gummy version of an existing drug with an estimated target market of $1.5bn per year.
This product, fully funded by the pharmaceutical partner, is expected to launch in the second half of 2027. The acquired operations maintain a development backlog estimated at approximately $60m during the next 2–3 years.
Eyal Shohat (pictured), CEO of TopGum, said: "This is a significant milestone for TopGum, which facilitates our entry into the pharmaceutical domain with proven manufacturing capabilities and an advanced development pipeline."
"The collaboration with a US leader positions TopGum at an excellent starting point for continued accelerated growth."
"I would like to thank our outgoing Chair, Hagai Stadler, for his significant contribution to advancing and completing this transaction as part of his key role in transforming TopGum into a global leader."
Hagai Stadler, TopGum's Chair, added: "This transaction represents a strategic leap forward and a new chapter in the company's life."
"Establishing a manufacturing foothold in the United States generates unparalleled value and positions TopGum at the forefront of the global industry. I thank the company's management and Board of Directors for this significant milestone."