Hikma Pharma To Buy Generic Sterile Injectables Firm Custopharm For Up To $425 Mln

Hikma Pharmaceuticals Plc. (HIK.L), a supplier of generic injectable medicines in the US, announced Monday its agreement to buy Custopharm Inc. from Water Street Healthcare Partners.

The company will pay an initial cash consideration of $375 million on a debt and cash-free basis, with a further $50 million in contingent consideration payable upon the achievement of certain commercial milestones.

Custopharm, a US-based generic sterile injectables company, is a growing business and Hikma expects it to generate full year 2021 revenue in excess of $80 million and for the acquisition to be accretive to Hikma's Injectables operating margin.

The up-front consideration is being funded from Hikma's existing cash resources.

The transaction is subject to US Federal Trade Commission approval.

Carlsbad, California -based Custopharm currently markets its products in the US through its commercial arm Leucadia Pharmaceuticals. Since partnering with Water Street in 2015, Custopharm has received 13 US FDA approvals, with four first-to-market Abbreviated New Drug Application (ANDA) approvals and one novel 505(b)(2) NDA approval.

Currently, Custopharm has 39 employees. The gross assets of Custopharm at December 31, 2020 were $43 million. Losses before tax in the year 2020 were $7.5 million.

Hikma said the acquisition complements its injectable product portfolio and pipeline, adding 13 approved products and additional pipeline products.

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