EUSA Pharma Spins Out of Jazz Pharma With Backing from Essex Woodlands

Mar 24 2015

HEMEL HEMPSTEAD, United Kingdom—After completing a $700 million deal to sell EUSA Pharma Inc. to Jazz Pharmaceuticals PLC in 2012, Essex Woodlands has teamed up with EUSA’s founding Chief Executive Bryan Morton to spin the company back out again.

Essex Woodlands was the largest investor in EUSA Pharma Inc., a trans-Atlantic specialty-pharmaceutical company formed in 2006. The company’s top product was Erwinaze, a treatment for patients with acute lymphoblastic leukemia, the most common type of cancer in children.

The original EUSA Pharma, whose other investors included Advent Venture Partners and SV Life Sciences, was profitable when it was acquired. Jazz bought EUSA for $650 million cash and a $50 million payment tied to a U.S. sales milestone for Erwinaze. That milestone was reached and the payment was made, according to Mr. Morton.

Mr. Morton and Essex Woodlands have teamed up to acquire five products that Jazz acquired when it bought the original EUSA Pharma. The new company, EUSA Pharma Ltd., is profitable and is based in the U.K. Terms of the sale weren’t disclosed in a news release. In a regulatory filing, Jazz said the purchase price for the disposed business was $34 million.

EUSA Pharma Ltd.’s products include Caphosol, which is used alongside standard care to treat and prevent oral mucositis, a side effect of radiation and high-dose chemotherapy; Fomepizole, an antidote approved in various European countries to treat poisoning from ethylene glycol; and Xenazine, a treatment for movement disorders associated with Huntington’s chorea and hemiballismus.

The five products had annual sales of about $27 million. EUSA Pharma Ltd. aims to increase these sales by at least 5%, Mr. Morton said. By acquiring and marketing these drugs, the company gains access to hospitals that are a major prescribers of specialty pharmaceuticals. Its next step is to acquire a drug that can boost its growth.
EUSA will look to acquire the best product it can rather than pursue a drug in a specific field, according to Mr. Morton. One lesson learned from the original EUSA Pharma is that a company can gain expertise in a market quickly by working with scientific advisers and key opinion leaders. This helped it turn Erwinaze into a success. The drug was initially approved in Europe and gained U.S. regulatory approval in 2011.

Write to Brian Gormley at [email protected]

VentureWire Newsletter, March 24th, 2015