Date: 2012-04-26
Type of information: Company acquisition
Acquired company: EUSA Pharma (USA)
Acquiring company: Jazz Pharmaceuticals (Ireland)
Amount: $680 million (€543million) in cash plus a potential $50 million (€37.9 million) milestone payment
Terms: Jazz Pharmaceuticals and EUSA Pharma have signed a definitive agreement under which Jazz Pharmaceuticals has agreed to acquire EUSA Pharma, a privately-held, specialty pharmaceutical company with headquarters in the United States and United Kingdom.
The transaction is expected to be immediately accretive to Jazz Pharmaceuticals’ adjusted earnings per share upon closing in 2012 and in 2013 is expected to provide additional revenue of $210 to $230 million, additional adjusted EBITDA of $75 to $85 million, and an additional $0.75 to $0.85 in adjusted earnings per share.
Jazz Pharmaceuticals acquired EUSA Pharma for $680 million in cash, which reflects a base price of $650 million and approximately $30 million of adjustments for EUSA's working capital, cash and certain liabilities, plus a potential $50 million milestone payable based upon Erwinaze® achieving a specified U.S. net sales target in 2013. The transaction was financed with cash on hand and proceeds from a six-year $475 million term loan with an initial interest rate based on a LIBOR rate, subject to a floor of 1.0 percent, plus 4.25 percent per annum. Jazz Pharmaceuticals has also arranged a revolving credit facility for $100 million , which is undrawn and has a five year term. Post-closing, the company's cash balance is in excess of $100 million .
Details: * On June 12, 2012, Jazz Pharmaceuticals has announced the closing of its acquisition of EUSA Pharma, a privately-held, specialty pharmaceutical company with a commercial presence in the U.S. and EU and a global distribution network. The acquisition brings a significant new specialty product to the company's U.S. product portfolio with Erwinaze® (asparaginase Erwinia chrysanthemi), a life-saving treatment for patients with acute lymphoblastic leukemia. Following the closing, Jazz Pharmaceuticals now also markets a portfolio of oncology and critical care products outside of the U.S., including Erwinase®, leveraging EUSA Pharma's international sales and marketing capabilities.
Jazz Pharmaceuticals expects to issue updated guidance for the combined company in conjunction with the upcoming announcement of its second quarter 2012 financial results. The EUSA Pharma transaction is expected to be accretive to earnings in 2012, adding expected incremental revenue of $90 million to $100 million and an estimated additional $0.25 to $0.30 in adjusted earnings per share.
EUSA Pharma has approximately 180 employees, with operations in the U.S. (Langhorne, PA) and Europe (including offices in Oxford, UK and Lyon, France). EUSA Pharma's business outside of the U.S. will retain its existing name, with responsibility for marketing a portfolio of products outside of the U.S., including managing the pan-European presence and distribution network in numerous additional territories. This business will be led by Bryan Morton , founder and former CEO and President of EUSA Pharma. The current portfolio consists of specialist hospital products which are sold in over 79 countries globally, including: Erwinase® , Caphosol® (supersaturated calcium phosphate rinse), Collatamp® (lyophilized collagen implant impregnated with the aminoglycoside antibiotic gentamicin), Fomepizole® (fomepizole), Kidrolase® (Escherichia coli L-asparaginase) and Xenazine® (tetrabenazine).
The FDA approved Erwinase® in November 2011 (See http://biopharmanalyses.fr/product/?pageid=230). Erwinaze® is indicated as a component of a multi-agent chemotherapeutic regimen for the treatment of patients with acute lymphoblastic leukemia who have developed hypersensitivity to E. coli-derived asparaginase. The product has orphan drug exclusivity through November 2018 and biologic data exclusivity through 2023. In addition, it is currently approved in seven countries outside the U.S., where it is marketed by EUSA Pharma under the trade name Erwinase®.
EUSA Pharma has a portfolio of 10 oncology, critical-care and oncology supportive care products currently marketed directly in the U.S. and Europe and via distributors in other countries. Its pipeline includes two additional drug candidates: Leukotac® (inolimomab), an anti-CD25 monoclonal antibody in a phase III pivotal study in Europe for treatment of steroid-refractory acute graft versus host disease and Asparec®, a pegylated recombinant Erwinia asparaginase currently in phase I development in Europe for the treatment of acute lymphoblastic leukemia in patients with hypersensitivity to standard-of-care E. coli-derived asparaginase therapy. This product has been developed by the french company Alize Pharma and the two companies have concluded a licensing agreement on February 2012 (See http://biopharmanalyses.fr/agreements/?pageid=660).
Related: Oncology
Critical care
