Alexion Pharmaceuticals Inc. (ALXN) Wednesday agreed to acquire privately held Enobia in a move to gain access to asfotase alfa - an orphan drug that is currently in Phase II study for treating a very rare disease called hypophosphatasia.
As per the terms, Connecticut-based Alexion has agreed to pay Enobia $610 million in cash upon completion of the deal, which is expected in the first quarter 2012. It will also pay $470 million when regulatory and sales milestones are met.
Alexion said it plans to finance the deal with cash on hand and $300 million of bank debt. The deal does not involve issue of equity.
Both company Boards have approved the transaction, which is subject to customary conditions, including expiration of waiting period under Hart-Scott-Rodino Act.
Enobia, based in Montreal, Canada and Cambridge, Massachusetts, has its lead product candidate in asfotase alfa - a human recombinant targeted alkaline phosphatase enzyme-replacement therapy - indicated for a ultra-rare, life-threatening metabolic disease called hypophosphatasia, or HPP, for which there are no approved treatment options.
Alexion will acquire full worldwide development and commercial rights to asfotase alfa, which was awarded orphan drug designation in the US and EU in 2008, as well as Fast Track status in the US in 2009.
Alexion CEO Leonard Bell said, "Asfotase alfa has shown very compelling Phase II clinical data in infants and juveniles with hypophosphatasia. The acquisition of Enobia is very well aligned with Alexion's objective to develop and deliver life-transforming therapies for patients suffering with ultra-rare, severe, and life-threatening disorders."
In light of the deal, Alexion affirmed its outlook for 2011. The company's 2012 non-GAAP research expenses are expected to transiently rise to about 20 to 21 percent of sales, due to activities associated with Enobia's programs, and then revert to the target of about 17 to 18 percent of sales in 2013.
Goldman, Sachs & Co. is acting as financial adviser to Alexion, and Ropes and Gray LLP as legal counsel. Bank of America Merrill Lynch is financial adviser to Enobia, and WilmerHale as legal adviser.
ALXN closed Wednesday at $70.92, down $0.63 or 0.88%, on the Nasdaq. In after hours, the stock further dropped 1.65%.
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