Date: 2015-05-15
Type of information: Company acquisition
Acquired company: Aerocrine (Sweden)
Acquiring company: Circassia Pharmaceuticals (UK)
Amount: SEK 1.78 billion (approximately £139 million)
Terms: * On May 15, 2015, Circassia Pharmaceuticals announced that it intends 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 consideration of a fixed amount of SEK 2.55 for each Aerocrine Share, with the total consideration being up to SEK 1.78 billion (approximately £139 million), such amount to be paid in cash. Novo A/S, holder of 25.2 per cent of the votes in Aerocrine, and Invifed AB, holder of 24.8 per cent of the votes in Aerocrine, have committed to accept the Offer with respect to all of their shares in Aerocrine, subject to certain conditions. As at 31 March 2015 Aerocrine had net cash of SEK 189 million (£17 million).
Circassia also announced its intention 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. Circassia has separately announced that it proposes to raise £275 million, through a Placing and Open Offer.
Details: These proposed acquisitions and associated fundraising wil accelerate Circassia’s strategy to become a self-sustaining specialty biopharmaceutical company focused on allergy and asthma. The rationale for the Acquisitions is to accelerate Circassia’s strategy to build a self-sustaining specialty pharmaceutical business by; i) optimising the launch of its Cat-SPIRE allergy immunotherapy product candidate, once approved, using Aerocrine’s established sales force and commercial infrastructure in the United States and Germany, which is already targeting the allergy/asthma specialists who comprise Circassia’s core customers; ii) expanding Aerocrine’s sales force to target robust sales growth of Aerocrine’s market leading device used in asthma diagnosis and management, and to prepare for the launch of Circassia’s lead product; and iii) by complementing its offering to these allergy/asthma specialists by adding Prosonix’s near-term asthma products, once approved, to Circassia’s portfolio of novel allergy immunotherapies.
Through Aerocrine’s experience and capabilities in achieving reimbursement and inclusion in the treatment guidelines of leading allergy and asthma organisations in the Company’s key target market, the United States, and with an established sales force in Europe’s largest allergy immunotherapy market, Germany, the Aerocrine Acquisition could allow Circassia to accelerate the successful launch of its allergy products currently in development, and through the acquisition of Prosonix to expand its portfolio of complementary late-stage product candidates. Aerocrine is currently focused on the development and commercialisation of medical diagnostic products for use in the diagnosis and management of patients with asthma. Its sales and marketing organisation includes 28 sales representatives calling on allergy/asthma specialists in the United States, five tele- marketers targeting repeat business and five sales representatives in Germany, together with associated functions including medical affairs, regulatory, marketing, distribution, compliance, commercial operations, market access, customer service, finance and reimbursement. Aerocrine currently markets two products, NIOX MINO® and NIOX VERO®, which are based on its core proprietary technology of fractional exhaled nitric oxide (FeNO) measurement. Aerocrine generated revenues of SEK 166.2 million (£14.7 million) in the financial year ended 31 December 2014.
Circassia believes that the Acquisitions will add a sales organisation including (i) 28 US sales representatives, and five tele-marketers targeting repeat business, who are already calling on allergy/asthma specialists, Circassia’s core customers, providing strong access to and a deep knowledge of this key physician target group, (ii) five sales representatives in Germany and (iii) associated functions including medical affairs, regulatory, marketing, distribution, compliance, commercial operations, market access, customer service, finance and reimbursement. It will also accelerate the development of Circassia’s commercial activities ahead of the anticipated launch of Cat-SPIRE, by having commercial infrastructure established well ahead of the potential launch, with a trained sales force and key marketing activities in place, and through regular contact with physicians who would prescribe Cat-SPIRE, if approved. Circassia believes this should improve the effectiveness of Cat-SPIRE’s launch and accelerate product uptake, if approved. The transaction will also add NIOX MINO® and NIOX VERO®, commercialised, patent-protected and innovative products that have a demonstrated ability to improve the diagnosis, treatment and care of asthma patients, with ongoing combined sales growth.
Aerocrine’s products are based on research demonstrating that raised levels of NO in exhaled air can be an indicator of inflammation in the airways. By measuring, identifying and controlling the inflammation rather than just measuring lung function and symptoms, the diagnosis, treatment and care of patients can be improved. Aerocrine’s medical diagnostic products are used to facilitate the diagnosis, and improve the treatment and monitoring of patients with inflammation of the airways. This allows physicians to assess and apply the correct treatment or adjust on-going treatment if the patient’s adherence is shown to be
Related: Allergic diseases - Inflammatory diseases - Respiratory diseases
