Alessia Argentieri

Will Macadam

Bianca Boorer

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Lenders to UK-based specialty pharmaceutical company Pharmanovia, owned by private equity firm Triton, are hearing pitches from legal advisors as pressures intensify around the company’s capital structure, according to 9fin sources.

Milbank and Paul Weiss are among the law firms in the running for the mandate, the sources said. The lenders group includes CVC, which holds the largest position in the company’s TLB, according to 9fin data.

The company, which is being advised by Kirkland & Ellis, has recently launched a tender offer on its debt at below-par levels, a move that has prompted resistance from some creditors, a move that has drawn resistance from some creditors, as 9fin recently reported.

Some lenders argued that the tender was premature and priced too low, risking a transfer of value away from creditors at a point when asset sales and operational stabilisation could materially improve the company’s credit profile.

The lender pushback came shortly after Pharmanovia announced the disposal of the majority of its bone health operations in mainland China, Hong Kong, Taiwan, and Macao last month.

While the disposal is expected to generate cash for debt reduction, creditors say the company has yet to clarify the size, timing or use of proceeds. Management outlined plans to stabilise operations and boost liquidity on an investor call last week, but some lenders said the update lacked sufficient detail on asset sales and financial performance to justify participating in the tender.

A trading update with Q3 25 numbers is expected at the end of February.

Pharmanovia has been grappling with a mix of supply chain disruption, inventory mismanagement, and regulatory headwinds that have weighed on the wider specialty pharma sector.

The company’s performance has weakened across several core products. Sales of Rocaltrol have come under sustained pressure, while higher-margin medicines have posted steep year-on-year declines, including Bonviva, down 51%, and Valium, down 41%, eroding both profitability and cash flow. In response, the group has launched an operational turnaround plan focused on restoring margins through cost reductions, tighter working capital controls and a shift in sales efforts towards more profitable products and markets.

As part of this reset, Pharmanovia appointed a new chief executive last October, Stephan Eder, a former Novartis executive, to lead the transformation.

Credit concerns intensified after S&P downgraded the company and its senior term loan earlier this month to CCC+ from B- and placed the ratings on CreditWatch negative.

The agency expects adjusted debt to EBITDA to remain well above 10x in the year to March 2026 and warned that the company’s capital structure may be unsustainable over the longer term.

The downgrade followed earlier warnings from other ratings agencies. Moody’s cut its outlook on Pharmanovia to negative in June, while Fitch downgraded the company to B-, arguing that the capital structure was unsustainable and highly sensitive to further underperformance in the absence of a clear deleveraging plan.

Pharmanovia’s €980m TLB, which was trading close to par at the beginning of last year, slid into the 40s in October and now sits in the mid-50s, reflecting growing investor scepticism about the group’s financial stability.

Founded in 2013 and headquartered in Basildon, Essex, Pharmanovia specialises in acquiring and managing off-patent branded prescription medicines across multiple therapeutic areas.

Triton acquired the business in 2019 and pursued an aggressive buy-and-build strategy, expanding the portfolio through a series of bolt-on acquisitions.

In 2023, Triton attempted to sell the company through an auction that reportedly valued Pharmanovia at around £2bn. Although several private equity firms, including Permira, showed interest, the process ultimately fell apart amid tight financing markets and disagreements over valuation.

Triton and CVC declined to comment. Pharmanovia, Milbank, and Paul Weiss did not respond to requests for comment.

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