Jazz Pharmaceuticals Enters Definitive Agreement to Acquire EUSA Pharma

Apr 27 2012

DUBLIN and LANGHORNE, Pennsylvania—Jazz Pharmaceuticals plc (Nasdaq: JAZZ) and EUSA Pharma Inc. today announced that the companies have signed a definitive agreement under which Jazz Pharmaceuticals has agreed to acquire EUSA Pharma, a privately-held, specialty pharmaceutical company with headquarters in the United States and United Kingdom, for $650 million in cash1 and a potential $50 million milestone payable in cash based upon its lead product, Erwinaze™ (asparaginase Erwinia chrysanthemi), achieving a specified U.S. net sales target in 2013.

The transaction would provide Jazz Pharmaceuticals with an expanded portfolio of specialty pharmaceutical products and an enhanced commercial platform, incorporating EUSA Pharma’s specialty commercial infrastructure in the United States and Europe and its international distribution network. The combined organization’s portfolio would have products marketed in the U.S. and Europe, including Erwinaze, a life-saving treatment for patients with acute lymphoblastic leukemia (ALL). The transaction is expected to be immediately accretive to Jazz Pharmaceuticals’ adjusted earnings per share upon closing in 2012 and in 2013 is expected to provide additional revenue of $210 to $230 million, additional adjusted EBITDA of $75 to $85 million, and an additional $0.75 to $0.85 in adjusted earnings per share.

“EUSA Pharma is a compelling strategic fit with our specialty focus and commercial expertise, and furthers our mission to improve patients’ lives by delivering therapies that address serious unmet medical needs,” said Bruce C. Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. “This transaction would expand our global footprint and marketed product portfolio to include Erwinaze, a treatment for a life-threatening form of leukemia, as well as other highly specialized products. Our organizations are highly complementary, and we look forward to working with our new colleagues to build an even stronger rapidly-growing company.”

“The combination of Jazz Pharmaceuticals and EUSA Pharma would bring together two highly successful businesses, with teams who are passionate about providing patients with access to vital specialty therapies,” said Bryan Morton, founder, president and chief executive officer of EUSA Pharma. “There is a strong fit between our two companies’ products, people and values, and the combination would represent a positive transaction for the patients we serve, our collective employees and our shareholders. As a larger and stronger combined organization, we would have greater resources to continue our growth toward becoming a leader in the specialty pharmaceutical sector, bringing our medicines to patients worldwide.”

EUSA Pharma is a specialty pharmaceutical company founded in 2006, with 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 approximately $46 million. Its largest product is Erwinaze, developed as a treatment option for patients with ALL who are hypersensitive to E. coli-derived asparaginase. Approximately 3,600 people younger than 20 years are diagnosed with ALL each year, with a peak incidence between ages 2-5 in the United States.2,3 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. In addition, it is currently approved in seven countries outside the U.S., where it is marketed by EUSA Pharma under the trade name Erwinase®.

In addition to ongoing development to expand the available methods of Erwinaze administration to include IV delivery, EUSA Pharma’s pipeline includes two additional drug candidates: Asparec®, a pegylated recombinant Erwinia asparaginase currently in phase I development in Europe for the treatment of ALL in patients with hypersensitivity to standard-of-care E. coli-derived asparaginase therapy; and Leukotac® (inolimomab), an anti-CD25 monoclonal antibody in a phase III pivotal study in Europe for treatment of steroid-refractory acute graft versus host disease.

EUSA Pharma’s other products in the U.S. are Caphosol® (supersaturated calcium phosphate rinse), ProstaScint® (capromab pendetide) and Quadramet® (Samarium Sm 153 Lexidronam Injection). Outside the U.S., EUSA Pharma’s principal products are Caphosol®, Collatamp® (lyophilized collagen implant impregnated with the aminoglycoside antibiotic gentamicin), Fomepizole® (fomepizole), Kidrolase® (Escherichia coli L-asparaginase), and Xenazine® (tetrabenazine).

EUSA Pharma has approximately 180 employees, with operations in the U.S. (Langhorne, PA) and Europe (including offices in Oxford, UK and Lyon, France). EUSA Pharma’s Founder, President and Chief Executive Officer, Bryan Morton, would remain with the organization with responsibility for the new international operations.

Transaction Close and Financing

The proposed acquisition, which has been approved by the boards of directors of both companies and the stockholders of EUSA Pharma, is subject to the satisfaction of customary closing conditions and regulatory approvals, including antitrust approval in the U.S. The proposed acquisition is not subject to approval by the shareholders of Jazz Pharmaceuticals. The closing of the transaction is anticipated to occur in June 2012.
Jazz Pharmaceuticals expects to finance the transaction with a combination of cash on hand and proceeds from a new $500 million term loan for which Barclays Bank PLC has provided a binding commitment letter. The commitment letter also provides for an additional $100 million revolving credit facility. The commitment to provide the term loan and revolving credit facility is subject to the satisfaction of customary conditions.


Jazz Pharmaceuticals’ financial advisor for the transaction is Barclays, and its primary legal advisors are Cooley LLP, Baker & McKenzie and A&L Goodbody (Dublin). 
EUSA Pharma’s financial advisor for the transaction is Morgan Stanley, and its primary legal advisor is K&L Gates. EUSA Pharma’s stockholders include Essex Woodlands, 3i, Advent Venture Partners, SV Life Sciences, TVM Capital, NeoMed and NovaQuest.

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