Eyal Shohat, CEO of TopGum, told NutraIngredients that the acquisition does not change the company’s focus on being a leader in dietary supplement gummies but does add a new layer of capabilities that expands what is possible within supplements and allows for pharmaceutical-grade gummy production.
“This expansion does not dilute our supplement business—it strengthens it,” he said. “It gives our teams and partners more tools, more flexibility and a much longer innovation runway. Operationally, it elevates our standards in quality systems, validation, regulatory expertise and manufacturing excellence across the entire company.”
TopGum will pay a total of $25 million to acquire the U.S. operations, comprising $12 million in cash and $13 million in shares at the time of the transaction. The deal could also potentially include future considerations of up to $12 million, payable through TopGum shares, depending on certain sales targets being met.
Producing pharmaceutical-grade gummies
With the transaction, TopGum gains access to manufacturing capabilities that allow the company to create pharmaceutical-grade gummies containing active pharmaceutical ingredients (APIs).
Included within the U.S. operations are a manufacturing facility with active production lines, a laboratory trials line and infrastructure with capacity for expansion. The facility already complies with FDA requirements, TopGum stated.
The acquisition continues to support the strenghthiening of the company’s position in the U.S. market following the establishment of its U.S. subsidiary in New Jersey in 2021 and acquisition off Island Abbey Nutritionals, a contract developer and manufacturer of gummy and lozenge supplements in 2023.
With this latest acquisition agreement, TopGum has also agreed to a long-term partnership with the selling company. The partnership will involve a “strategic collaboration” for the commercialization of TopGum’s dietary supplement and pharmaceutical gummy product portfolio. TopGum has also agreed to appoint one director nominated by the selling company.
Instead of using its expanded manufacturing capacity to launch its own products, Shohat confirmed that TopGum will continue focusing its role as a manufacturing partner. He emphasized that developing and owning a customer-facing supplement brand is not part of the company’s strategy.
Supplementing the pharmaceutical industry
A new part of its strategy will be to expand into producing pharmaceutical products in gummy dosage forms. According to TopGum, the selling company has several pharmaceutical gummy products set to launch in 2026.
In addition, the seller had entered into an agreement for the development of a gummy version of an existing drug with an estimated target market of $1.5 billion per year. This product is set to launch in the second half of 2027.
In terms of revenue generated by the acquisition, TopGum stated that the development backlog at the U.S. operations is estimated to be worth $60 million over the next two to three years.
“We believe that what happened in the vitamins and supplements market will eventually happen in parts of the pharmaceutical market as well,” Shohat said. “We do not expect gummies to replace pills entirely. However, for many patients—especially those who take daily medications, have difficulty swallowing pills, or struggle with adherence—gummies can offer a better experience and therefore better compliance.”
