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Water Street Healthcare Partners forms new company to develop generic products

Chicago-based private equity firm Water Street Healthcare Partners said Monday that it has partnered with an unnamed pharmaceutical company to form a new standalone company. Based in Chicago and chaired by Al Heller, a partner at Water Street and former CEO of American Pharmaceutical Partners, the new company will fund and develop generic products.


CHICAGO – October 7, 2013 – Water Street Healthcare Partners, a strategic investor focused exclusively on the health care industry, announced today that it has partnered with one of the world’s leading pharmaceutical companies to develop a set of generic products. The collaboration is a new model of outsourcing that is designed to provide pharmaceutical companies with greater flexibility and support to maximize their investment in drug development.

Water Street has created a standalone company that will fund and lead the development and approval processes of multiple generic product families over the next several years on behalf of its pharmaceutical client. As each product receives regulatory approval, the client will purchase that product at a previously agreed upon price. Water Street’s company will be based in Chicago and chaired by Al Heller, a longtime operating partner with Water Street and the former CEO of American Pharmaceutical Partners Inc. Water Street plans to roll out its new Pharmaceutical Partnership Program to other companies.

“This is an exciting new approach that Water Street has developed in collaboration with a pharmaceutical leader to free up resources to address additional high-priority R&D initiatives, while recognizing the importance and the value of generic drug development in serving the broader needs of health care practitioners and patients,” said Mr. Heller. “Our team’s years of experience operating and growing pharmaceutical companies uniquely positioned Water Street as the partner this company’s executive team trusted to fund and develop these important drug products. We are in discussions with several other corporations about this approach, and I expect more will adopt it as they search for new ways to fund the next generation of drugs and realize the full value of their assets.”

Water Street’s new program marks another milestone in its history of collaborating with global health care corporations to invest in pharmaceutical businesses. In 2010, Water Street partnered with Johnson & Johnson to acquire and grow its oral health pharmaceutical business, OraPharma. In 2009, it worked with AAIPharma Inc. to acquire its pharmaceutical drug development business and double its customer base. Earlier this year, Water Street announced that it had invested in two global businesses specializing in outsourced clinical services.

“Our partnerships with global corporations to build our own group of pharmaceutical businesses gives us a perspective few others have into their day-to-day operations,” said Peter Strothman, a partner with Water Street. “It is exciting to engage our expertise and collaborate with an industry leader to create an innovative solution that supports both of our goals for creating greater long-term value in our organizations.”

About Water Street
Water Street is a strategic investor focused exclusively on health care. The firm has a strong record of building market-leading companies across key growth sectors in health care. It has worked with some of the world’s leading health care companies on its investments including Gentiva, Johnson & Johnson, Medtronic and Orthofix. Water Street’s team is comprised of industry executives and investment professionals with decades of experience investing in and operating global health care businesses. The firm is headquartered in Chicago. For more information about Water Street, visit