Date: 2015-05-15
Type of information: Company acquisition
Acquired company: Prosonix (UK)
Acquiring company: Circassia Pharmaceuticals (UK)
Amount: up to £100 million (up to € 138,3 million)
Terms: * On May 15, 2015, Circassia Pharmaceuticals announced that it intends to acquire Prosonix, a privately-held specialty pharmaceutical company focused on the development of product candidates for the treatment of asthma and / or chronic obstructive pulmonary disease (COPD), for an aggregate cash consideration of up to £100 million to be paid in cash, of which £30 million is contingent on UK approval of Prosonix’s lead product, which is currently under review by the UK Medicines and Healthcare products Regulatory Agency (MHRA). Circassia also intend to make an all cash offer to acquire Aerocrine, a Swedish listed company focused on the development and commercialisation of medical diagnostic products for use in the diagnosis and management of patients with asthma, for a total consideration of up to SEK 1.78 billion (approximately £139 million). Circassia has separately announced that it proposes to raise £275 million, through a Placing and Open Offer. The Placing and Open Offer is being fully underwritten by J.P. Morgan Cazenove and Peel Hunt. A General Meeting is to be held at Northbrook House, Robert Robinson Avenue, Oxford Science Park, Oxford, Oxfordshire, OX4 4GA, United Kingdom at 10.00 a.m. on 10 June 2015 for the purpose of seeking approval for the Aerocrine Acquisition and the proposed Placing and Open Offer. Invesco Asset Management, as agent for and behalf of its discretionary managed clients, Imperial Innovations, Woodford Investment Management and Lochside (International) Ltd, who account for c.57 per cent of Circassia\'s issued share capital, have indicated their support for the Placing and the Acquisitions and their current intention is to vote in favour of the Resolutions at the General Meeting. Funds managed by Invesco Asset Management Limited and Woodford Investment Management have indicated their intention to participate in the equity raise.
Details: The proposed acquisitions and associated fundraising wil accelerate Circassia’s strategy to become a self-sustaining specialty biopharmaceutical company focused on allergy and asthma. Prosonix’s innovative technology will bring Circassia a portfolio of near-term products targeting asthma and other respiratory diseases, which complement its current pipeline. Through the acquisition of Prosonix, Circasssia will expand its portfolio of complementary late-stage product candidates. Prosonix is a specialty pharmaceutical company focused on the development of a range of product candidates for the treatment of asthma and/or COPD. Prosonix’s portfolio is based on its proprietary particle engineering technology and Prosonitron® reactor system, which enables precise control of pharmaceutical product crystallisation during manufacture, and subsequent delivery characteristics. Prosonix’s technology platform is established at commercial scale, and its lead product is currently under review by UK regulatory authorities with a decision anticipated in H2 2015, with additional product filings planned in H2 2015 and H1 2016. Prosonix’s pipeline includes late-stage product candidates, which are designed to be directly substitutable for market-leading asthma and/or COPD treatments, Flixotide®/Flovent® Pressurized Metered Dose Inhalers (pMDI), Serevent® pMDI and Advair®/Seretide® pMDI. Prosonix is also using its proprietary technology to develop a number of novel particle-engineered respiratory product formulation/presentations, including a triple fixed dose combination of an inhaled corticosteroid (ICS), long-acting beta agonist (LABA) and long-acting muscarinic antagonist (LAMA), and a potential future competitor for leading COPD treatment, Spiriva®. Prosonix’s lead candidate, which is designed as a substitute for GSK’s Flixotide® pMDI is currently undergoing regulatory review under the European decentralised procedure, with a decision on the first approval anticipated from the MHRA in H2 2015. Filing for Prosonix product candidate targeting substitution for Serevent® pMDI is anticipated in H2 2015 in the UK under the European Decentralised Procedure, and for its candidate targeting substitution for Seretide® in H2 2016. Prosonix’s triple fixed dose combination and potential competitor for Spiriva® are longer term programmes, with filings anticipated in the US in 2020 and 2021, respectively. Prosonix is pursuing a regulatory strategy for its near-term pipeline that exploits the Abbreviated New Drug Application (ANDA) procedure in the United States and guidelines on Orally Inhaled Products (OIP) in the European Union. Under this approach, Prosonix intends to pursue regulatory approval based on demonstrating in vitro product equivalence. Circassia anticipates that following the Acquisitions, the Enlarged Group will extend the commercial infrastructure in the United States currently targeting allergy/asthma specialists. It anticipates that by Q1 2017 the sales force will be around 100-strong in preparation for the launch of Cat- SPIRE, if approved. The Company anticipates that the current timeline to cash generation will remain on track, with earnings enhancement by 2018 and is targeting a combined return on investment in relation to the Acquisitions of greater than 20% within 4 to 5 years. On completion of the Acquisitions the Directors believe that the Enlarged Group will be fully funded to deliver on its plans, including the development of its current product portfolio.
Related: Allergic diseases - Inflammatory diseases - Respiratory diseases
