Jazz Pharmaceuticals Plc (JAZZ) and EUSA Pharma Inc. have signed a definitive agreement for Jazz to acquire EUSA for $650 million in cash and a potential $50 million milestone payment. The milestone payment will be made in cash based upon EUSA's lead product Erwinaze achieving a specified U.S. net sales target in 2013. Shares of Jazz surged over 13 percent in after-market trading.
EUSA is a privately-held, specialty pharmaceutical company. Founded in 2006, it has a portfolio of 10 oncology, critical-care and oncology supportive care products currently marketed directly in the U.S. and Europe and via distributors in other countries.
The company's first quarter 2012 net sales were around $46 million. Its largest product is Erwinaze, a treatment option for patients with acute lymphoblastic leukemia or ALL who are hypersensitive to E. coli-derived asparaginase.
Erwinaze was approved by the U.S. Food and Drug Administration in November 2011, and has orphan drug exclusivity through November 2018 and biologic data exclusivity through 2023.
The deal is expected to be immediately accretive to Jazz's adjusted earnings per share upon closing in 2012. In 2013, it is expected to provide an additional $0.75 to $0.85 in adjusted earnings per share, additional revenue of $210 to $230 million and additional adjusted EBITDA of $75 to $85 million.
The transaction would provide Jazz with an expanded portfolio of specialty pharmaceutical products. It will also benefit from a more developed commercial platform, incorporating EUSA's specialty commercial infrastructure in the U.S. and Europe and its international distribution network.
The combined organization's portfolio would have products marketed in the U.S. and Europe, including Erwinaze. EUSA Pharma has about 180 employees. Its founder, president and CEO Bryan Morton would remain with the organization with responsibility for the new international operations.
Bruce Cozadd, CEO of Jazz, said, "EUSA Pharma is a compelling strategic fit with our specialty focus and commercial expertise...This transaction would expand our global footprint and marketed product portfolio to include Erwinaze...as well as other highly specialized products.''
The acquisition has been approved by the boards of directors of both companies and is expected to close in June. Jazz plans to finance the transaction with a combination of cash on hand and proceeds from a new $500 million term loan.
JAZZ, which had closed Thursday's regular trade lower by 0.40 percent at $45.20, climbed 13.05 percent in trading after the market close.
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