TopGum Gears Up for Strategic Expansion in Pharmaceutical Market with U.S. Acquisition

TopGum Industries Ltd., a prominent player in the dietary supplements market, made a significant announcement as it prepares to expand into the pharmaceutical domain. The company, based in Sderot, Israel, revealed that it has signed a Binding Letter of Intent (LOI) to acquire operations engaged in the manufacture of pharmaceutical products and dietary supplements specifically in gummy form, based in the United States. This deal not only signifies a strategic entry into a new market but also highlights the increasing popularity of gummy supplements, which are renowned for their palatability and ease of consumption.

The acquisition involves a leading U.S. company proficient in generic pharmaceuticals and a key provider of manufacturing and development services in the health products sector. This partnership is expected to capitalize on the seller's extensive connections with major U.S. retailers, thus enhancing TopGum’s market penetration. Furthermore, the acquired facility will hold operational capabilities to produce pharmaceutical-grade gummies infused with active pharmaceutical ingredients (APIs), a first in the global market.

The economic aspects of the deal include a cash payment of $12 million upon closing, along with the issuance of shares valued at $13 million based on a set share price. The agreement also incorporates contingent future consideration of up to $12 million, based on achieving designated sales targets. In a strategic move towards collaboration, TopGum has committed to appoint a director nominated by the seller, ensuring a conducive environment for shared growth and vision.

TopGum's CEO, Eyal Shohat, expressed that this acquisition marks a pivotal milestone for the company, facilitating a seamless entry into the pharmaceutical arena. He emphasized the value of established manufacturing capabilities and a robust developmental pipeline that positions TopGum for accelerated growth. Furthermore, the prospective long-term collaboration aims to broaden the commercialization of both dietary supplements and pharmaceutical gummy products.

In line with the acquisition strategy, several products associated with pharmaceuticals are slated for release, projected to begin in 2026. Among the notable products is a gummy version of an existing drug, backed by one of the world’s prominent pharmaceutical companies, targeting a market estimated at $1.5 billion annually. This initiative is fully funded by the pharmaceutical partner with an expected launch projected for the latter half of 2027. Notably, the operations under acquisition have a development backlog estimated to generate around $60 million in the next two to three years.

As the transformation of TopGum continues, the company’s chairperson, Hagai Stadler, referred to this acquisition as a significant leap forward, remarking on the immense value of establishing a manufacturing presence in the U.S. He highlighted the anticipated benefits that this recent development will bring to the company's future endeavors within the global industry landscape.

About TopGum:
Established in 2004, TopGum operates as a leading manufacturer of dietary supplements, specializing in gummy dosage formats. The company’s existing manufacturing facilities are strategically located in Sderot, Israel, and Canada, employing over 400 individuals. In a preceding strategic move in April 2025, TopGum acquired Island Abbey, a notable Canadian gummy supplement manufacturer. The company is publicly traded on the Tel Aviv Stock Exchange (TASE: TPGM) and is supported by both institutional investors and founder Hai Hayoun.

For updates and comprehensive information, visit TopGum's website.