Jazz Pharma to buy US rival Celator for about $1.5 bn
01 June 2016
Irish biopharmaceutical company Jazz Pharmaceuticals Plc yesterday struck a deal to buy US-based Celator Pharmaceuticals Inc. for about $1.5 billion.
Jazz Pharmaceuticals will pay $30.25 per share in cash for Celator, a 72.6-per cent premium to Celator's Friday closing price.
Jazz Pharmaceuticals is paying a huge premium for a company that has s a market value of about $740 million and no revenues but a promising leukaemia drug.
Certain stockholders of Celator holding approximately 18.4 per cent of its outstanding shares of common stock, including executive officers, members of the Celator board of directors and certain investment funds affiliated with the members of the board of directors, have agreed to tender their shares in the tender offer.
Jazz Pharma will fund the deal with a combination of cash on hand and borrowings under its credit facility.
Celator is an oncology-focused biopharmaceutical company that develops therapies to treat cancer.
The company focuses on CombiPlex, a drug ratio technology platform that enables to the development of combination therapies. Its products include CPX-1, a treatment for colorectal cancer, and CPX-351 (Vyxeos), a treatment for acute myeloid leukemia.
Princeton, New Jersey-based Celator was formerly known as Celator Technologies, Inc. and was founded in 2000.
Jazz has earlier based in California, but shifted its base to Dublin in 2012 after it acquired Irish pharma company Azur Pharma,
Dublin-based Jazz Pharmaceuticals is a biopharmaceutical company with a diverse portfolio of products and product candidates focusing in the areas of sleep and hematology / oncology.
It has two cancer drugs, Erwinaze, for the treatment for a blood cancer known as acute lymphoblastic leukemia, and US FDA approved Defitelio, a treatment for adults and children having hepatic Veno-Occlusive Disease with renal or pulmonary dysfunction following hematopoietic stem-cell transplants.
It has a market cap of about $9 billion and had nearly $1 billion in cash as of 31 March.
"Celator Pharmaceuticals is a strong strategic fit with Jazz Pharmaceuticals. VYXEOS will further diversify our product portfolio and is complementary to our clinical and commercial expertise in hematology/oncology," said Bruce Cozadd, chairman and CEO of Jazz Pharmaceuticals.
"As Celator is currently preparing a regulatory submission in the US for VYXEOS, this acquisition would add a new orphan product with the potential for short- and long-term revenue generation and expansion of our international commercial platform."
"We believe that Jazz Pharmaceuticals' clinical and commercial expertise in hematology / oncology and existing international infrastructure will help realize the value of VYXEOS as a treatment to patients with AML," said Scott Jackson, CEO of Celator.