Print“Aptalis has built a strong position in the North American and European gastroenterology and cystic fibrosis markets through internal product development and acquisitions of products and companies over the last few years, says Aptalis CEO Frank Verwiel.”
Forest Laboratories says it will buy Aptalis, a specialty pharma focused on gastrointestinal illness and cystic fibrosis owned by the private equity firm TPG Capital, for $2.9 billion in cash.
Buying Aptalis will help diversify Forest's business while adding nearly $700 million in revenue to its fiscal 2015 earnings, says company CEO and president Brent Saunders. Forest also expects to realize $125 million in annual savings should the combination succeed.
Forest has been looking to beef up its pipeline after seeing revenue fall as its top-selling drug Lexapro lost patent protection in 2012. Its Alzheimer’s drug Namenda faces patent expiration in 2015. The company also suffered another blow when the U.S. Food and Drug Administration declined to approve its experimental schizophrenia drug cariprazine in November.
News came out in August that TPG was looking to offload Aptalis for at least $3 billion. But after efforts to sell the specialty pharmaceutical failed, the company decided to file for an initial public offering in December.
“Aptalis has built a strong position in the North American and European gastroenterology and cystic fibrosis markets through internal product development and acquisitions of products and companies over the last few years,” says Frank Verwiel, CEO of Aptalis.
As many as 70 million Americans are affected each year by gastrointestinal disorders, according to the U.S. Department of Health and Human Services, with direct medical costs approaching $100 billion. Gastrointestinal disorders lead to about 14 million hospitalizations in the United States, or 10 percent of total hospitalizations, and 15 percent of all in-patient hospital procedures are attributed to treatment of GI disorders, according to Aptalis.
TPG formed Aptalis in 2010 by combining Axcan Holdings and Eurand. The company reported sales of $688 million in its most recent fiscal year, which ended September 2013. Sales of its top three products in the United States, Canasa, Carafate, and Zenpep, accounted for more than 60 percent of the company's 2013 revenue. International sales accounted for approximately 15 percent of revenues. Aptalis Pharmaceutical Technologies, a third party delivery technology provider and drug manufacturer, accounted for about 15 percent of revenues.
Forest expects to use a combination of cash on hand and debt to fund the transaction. Forest has secured commitment for a $1.9 billion bridge facility. The transaction is expected to close in the first half of 2014 pending regulatory review and satisfactory completion of necessary closing conditions.
January 10, 2014
http://www.burrillreport.com/article-forest_laboratories_to_acquire_aptalis_for_2_9b.html
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