Health Care Deal News: Spotlight on Pharmaceuticals- May 2012

Continuing with the month’s gout mini-theme, Takeda Pharmaceutical Co. (T: 4502) is acquiring URL Pharma, which manufactures Colcrys, a treatment for gout flare-ups. Out of URL’s nearly $600.0 million in annual revenue, Colcrys generated $430.0 million. Takeda is paying $800.0 million in an upfront payment and will make undisclosed future earnout payments beginning in 2015. This acquisition, valued at 1.3x revenue, complements Takeda’s existing gout treatment Uloric, which lowers uric acid levels in the blood. URL Pharma is to be managed by Takeda Pharmaceuticals U.S.A. Goldman Sachs and JP Morgan Securities provided Takeda and URL, respectively, with financial advice on this deal.

Jazz Pharmaceuticals plc (NASDAQ: JAZZ), a specialty pharma focused on neurology and psychiatry, is acquiring privately held EUSA Pharma, a trans-Atlantic specialty pharma focused on oncology, oncology supportive care and critical care products. EUSA’s major shareholders include Essex Woodlands, 3i, Advent Venture Partners, SV Life Sciences, TVM Capital, Neomed and NovaQuest. Under terms of the deal, JAZZ will pay $650.0 million in cash upfront, and up to $50.0 million in milestone payments based on reaching certain sales targets. At the full price of $700.0 million, the deal is valued at 3.2x revenue and 8.75x EBITDA. This transaction follows JAZZ’s merger with Azur Pharma and relocation to Ireland. The deal expands the buyer’s portfolio of specialty pharma products and enlarges the company’s global footprint. It is to be financed with a combination of cash on hand and a $500.0 million term loan from Barclays Bank PLC. Barclays and Morgan Stanley provided JAZZ and EUSA, respectively, with financial advice.

Biotech giant Amgen made two acquisitions in the pharmaceutical space in April. In the larger of the two, it is paying $700.0 million in cash for a 95.6% interest in Mustafa Nevzat Pharmaceuticals, a pharmaceutical company serving the Turkish market. For 2011, the Istanbul-based company generated revenue of approximately $200.0 million. This acquisition, valued at 3.5x revenue, significantly expands the buyer’s presence in Turkey; Amgen entered this market in 2010 and currently sells two drugs there. Mustafa Nevzat is the leading supplier of drugs to the hospital sector and a major supplier of injectables in Turkey. It also has an export business. This deal expands its product portfolio and will offer a channel through which to eventually market AMGN’s robust pipeline of clinical candidates. In its second deal and closer to home, Amgen is acquiring KAI Pharma, a South San Francisco-based company with a drug portfolio including a pain drug and treatments for cardiovascular disease and metabolic bone disease. The consideration is $315.0 million in cash. This deal expands AMGN’s drug pipeline. KAI’s lead drug, KAI-4169, is an intravenous therapy for patients with chronic kidney disease; it is in phase 2 trials..........Want to read more? Click here for a free trial to The Health Care M&A Information Source and download the current issue today