Evolution of the transdermal market: mergers, diversification, and business opportunities

German Müller

 – Business Development Manager.



Transdermal patches, those discreet allies we adhere to our skin to release drugs in a controlled manner, have come a long way since their introduction in 1979. While they have multiple advantages, they have not reached the market massively due to the significant challenges that a molecule must overcome to be administered by this route. To highlight this minority participation within the array of means to administer drugs to the body, we can mention that between 2015 and 2022, only 84 transdermal patches were approved out of a total of 7239 generic products by the FDA, representing just 1.2% of these products. 

The graph below shows the main variables of evolution within the global transdermal patches niche. It highlights the decline in revenue accompanied by the less pronounced decrease in the volume of units sold, the main factors of which have been analyzed in depth in this article. 

This publication will focus on examining how certain market actors interpret these dynamics, reflected in the increasing activity of mergers and acquisitions in the transdermal sector. 

Boiling Context 

Although the pharmaceutical industry is characterized by frequent mergers and acquisitions, the transdermal products segment has witnessed a series of operations in this area in recent years, in response to the aforementioned stage. 

These transactions do not all follow the same underlying logic. While the incentives are aligned with the evolution of the different stages of the market, the interpretations of these movements are diverse, and speculations about how the segment will evolve are the fundamental incentive for these operations. 

We can then make certain distinctions between these moments and incentives, as detailed below:


Transdermals Boom 

In the early 2000s, the logic was to take advantage of a pharmaceutical form that offered concrete advantages and experienced growth in all its variables. Numerous companies in the sector, as well as health-focused investment funds, joined this trend. 

Among the operations that followed this logic, we can highlight the following: Corium International acquired StrataGent Life Sciences in 2007, Apotex bought Aveva Drug Delivery Systems from Nitto Denko in 2012, IBSA acquired the assets of Bouty Healthcare, a manufacturer specializing in transdermal patches, towards the end of 2009, and even Helm AG strategically invested in Amarin Technologies SA after the successful launch of the Fentanyl patch in Europe, acquiring a stake in the company. 

However, the most significant transaction of the decade and probably in the history of the segment was Johnson & Johnson’s acquisition of Alza Corporation in March 2001 for around $10.5 billion. Alza was then the absolute leader in the segment thanks to products like Transderm-Scop, Duragesic, and Nicoderm, among others. 

Competition Expansion: 

Driven by the growth experienced in the niche at the beginning of the millennium, various competitors have entered the market, mainly in the generic segment, seeking to take advantage of a space with low competition and high growth. The number of companies offering this pharmaceutical form in their portfolio has increased by 61% in the last decade. 

While some expanded their capabilities to incorporate transdermal patches into their offerings, others chose to acquire strategic assets related to this drug delivery form. These acquisitions provide them with access to patented technologies, experience in patch formulation, and manufacturing capabilities, allowing them to develop and market innovative or generic transdermal products. Finally, there were also investment funds that bet on the growth of specific markets or individual companies. 

Here are some examples of these operations: 

In 2015, Teva acquired Allergan’s generics division, Actavis, for $40.5 billion. Logically, this included a hundred products of which only a portion were patches, however, it is important to highlight this event because it strengthened the presence of the Israeli company in this segment. 

In 2016, Luye Pharma Group Ltd. bought the transdermal business of Swiss Acino AG for around €245 million. This operation is particularly relevant as it represents the entry of a Chinese company into the transdermal products niche and significant regional expansion for the company. In addition, Acino was one of the companies with the most presence and trajectory in the sector, being the manufacturer of Bayer’s contraceptive patch, among other products. 

Gurnet Point Capital (GPC), a private investment firm focused on health and life sciences, acquired Corium International for around $504 million. This operation took place towards the end of 2018 and aimed primarily to provide the funds necessary to complete the development and approval of the Donepezil patch for the treatment of Alzheimer’s disease. 

Other notable operations in the sector were the spinoff of 3M’s transdermal business unit, acquired by Altaris Captial Partners in 2020 for $650 million, thus creating Kindeva Drug Delivery. Likewise, the merger of Upjohn (Pfizer’s generic products unit) and Mylan, a giant in the generics world, led to the new company called Viatris. A corporation that became the world’s largest generic company with a range of transdermal products among its vast offerings. 

Consolidation and New Horizons: 

In response to the contraction in transdermal sales over the past decade, two types of reactions have begun to occur in the market: the consolidation of the competitive landscape through mergers of long-standing companies in the sector, and the diversification of companies mainly dedicated to transdermals towards more or less complementary pharmaceutical forms. 

Regarding consolidation, two companies with headquarters in Europe and with great power in the transdermal segment stand out. Adhex Pharma, a French company founded in the 1980s with a secondary market share, has carried out a series of assertive actions with a clear expansion vision and betting on the growth of transdermal products. These operations included a strategic partnership with AMW GmbH towards the end of 2021, through which it took over the equipment, manufacturing, and intellectual property of the German company. A year later, it made an even more significant acquisition of another German company with a long history in the development and manufacture of transdermal products, Tesa Labtec GmbH. These alliances have allowed Adhex to share resources, knowledge, and risks, while taking advantage of the individual strengths of each company, consolidating it as one of the main companies in the industry exclusively dedicated to the development and manufacture of transdermal patches and oral films. 

LTS Lohmann Therapie-Systeme, one of the leaders in the industry, acquired Tapemark Ink, a company located in Minnesota, United States, also dedicated to the development and manufacture of transdermal products in August 2022. This purchase allowed LTS to expand its existing presence in North America and broaden its product offering, consolidating its leadership in terms of its production capacity. 

Regarding the actions triggered by market players to diversify their offerings in response to the contraction of patch sales, the most frequent movement used to go towards oral films since the manufacturing characteristics are similar to those of patches. However, this market has not experienced significant advances since its inception, except for a single product that concentrates almost all sales (Suboxone). 

A somewhat more challenging option is microneedle patches, which require audacity and investment, as although there are companies that have been working on this pharmaceutical form for some time, they have not yet managed to bring products to market. Two of the companies that have been investing in these developments over the past decade are Kindeva and LTS, with the latter even receiving a $4.3 million investment from the Bill & Melinda Gates Foundation towards the end of 2023 for the development of contraceptive patches with microneedles. Interestingly, these are the same companies that in recent years have made investments in innovative pharmaceutical forms to move away from their activity focused on transdermal patches and position themselves as companies specializing in what the FDA calls “combination products” (combination of drugs and medical devices). 

LTS recently acquired Sorrel, a high-volume portable injectable technology, from Eitan Medical, allowing it to expand its spectrum towards large molecules and biological products, something that is not possible in the transdermal patch spectrum. On the other hand, Kindeva made two acquisitions in this regard in 2022 and 2024: the first was the purchase of iPharma Labs, which gives it the ability to develop inhalation respiratory drugs, including nebulizers, dry powder inhalers, and metered-dose inhalers. The second was the acquisition of a company dedicated to innovative nasal sprays (Summit Biosciences), which adds a new administration platform to Kindeva’s offering. This also includes a manufacturing plant that adds to the 8 already owned by the company in the USA and UK. 

Consequences and Perspectives: 

In summary, the analysis of the transdermal patch market highlights a stage of maturity in the pharmaceutical industry, marked by intense merger and acquisition activity. In this phase, companies are adopting diverse strategies: on the one hand, some are strengthening their position in the transdermal market, anticipating future sales growth of patches through the launch of new molecules, whether innovative or available in other pharmaceutical forms, or even through improvements to existing products. 

On the other hand, there are companies that are diversifying their portfolios towards new technologies and pharmaceutical forms, foreseeing that traditional transdermal patches may be reaching the end and that the pharmaceutical industry will move towards new drug delivery forms. Some have incorporated innovative startups in the field of combination products, and others are seeking antifragile positions in order to be a necessary nexus for these eventual new technologies regardless of which one prevails. 

However, it is important to note that the future remains uncertain, and it is not clear which of these approaches will prevail. It will be crucial to keep an eye on the evolution and upcoming moves in the market to determine which strategies will be most successful in this context of uncertainty. External factors such as technological advances, regulatory changes, and consumer trends will also influence the direction the market takes in the coming years. Ultimately, companies that can remain flexible and focused on innovation will be better positioned to seize emerging opportunities and maintain their relevance in a constantly changing environment. 



























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