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Nov 5, 2009

Biovitrum to Acquire Swedish Orphan for Over $500M

  • Biovitrum is purchasing Swedish Orphan for SEK 3.5 billion (about $501.59 million) up front on a cash- and debt-free basis. With a combined product portfolio of some 60 orphan/niche specialty products, the new entity aims to achieve sales of over SEK 5 billion (roughly $716.30 million ) in 2015, with an EBIT margin of over 30% based on its current portfolio and pipeline.

    The acquisition of Swedish Orphan comes less than a week after Biovitrum confirmed selling its wholly owned drug discovery subsidiary, Cambridge Biotechnology (CBT), and a number of its own drug development programs to Proximagen Neuroscience.

    Biovitrum believes that Swedish Orphan will add successful business development, distribution, marketing, and regulatory support to its own product development and manufacturing expertise. “The two companies fit like a glove,” comments Martin Nicklasson, Biovitrum CEO. “By joining forces with Swedish Orphan, Biovitrum takes another important step in the transformation set out in the strategy adopted two years ago.”

    Swedish Orphan’s product portfolio includes two proprietary drugs, Multiferon® and Orfadin™, along with a diverse in-licensing portfolio of another 50 products. Therapeutic areas include oncology, metabolic disorders, hematology, infectious diseases, urology/nephrology, and emergency medicines.

    In October Orfadin was approved in Russia for the treatment of the liver disease tyrosinaemia type 1. The drug had already been sanctioned in Europe (2005) and the U.S. (2002). In March 2009, Multiferon was approved in 15 EU countries for treatment of advanced stages of malignant melanoma. The multisubtype, natural human alpha interferon is also approved for use in patients with other diseases that have become resistant to recombinant interferon alphas. Registration in other European countries is in progress.

    With sales in over 50 countries worldwide, Swedish Orphan’s European presence includes 11 subsidiaries and six branch offices covering all areas in Europe. The company achieved sales in fiscal 2008/09 of SEK 694 million (about $99.34 million), and over the last five years achieved a CAGR of 18% and an EBIT CAGR of 45%.

    Biovitrum has eight marketed products along with one candidate in Phase III and another five in Phase II. In October Biovitrum and its partner Biogen Idec confirmed plans to advance the long-acting, fully recombinant Factor IX Fc fusion protein (rFIXFc) into a registrational trial in hemophilia B patients.

    Biovtrum also generates revenues from the manufacture of protein therapeutics for clinical and commercial supply and is the sole global manufacturer of the active protein substance in Wyeth’s hemophilia A drugs, ReFacto® and ReFacto AF®/Xyntha®. In December 2008, the companies extended their manufacturing agreement to the end of 2015.

    Biovitrum is separately developing another hemophilia A candidate, Factor VIIIFc (FVIIIFc), for which final preparatory work is ongoing for a first-in-man study in hemophilia A patients.

    Biovitrum’s other partnered project, Sym001, is in Phase II development in collaboration with Symphogen, for the treatment of immune thrombocytopenic purpura (ITP) and Rhesus immunization prophylaxis. Biovitrum’s in-house Phase II projects, meanwhile, includes the rhBSSL products, Kobrina™ and Exinalda™, which are in development for the treatment of fat malabsorption in premature infants and fat malabsorption due to pancreatic insufficiency, respectively.

    In 2008, Biovitrum established its marketing organization in Europe, the U.S., Canada, Australia, and New Zealand through a three-product license and acquisition agreement with Amgen. The $130 million up-front deal comprised a worldwide license to the rheumatoid arthritis drug Kineret® and the acquisition of the blood cell growth factor Stemgen® as well as oral mucositis therapy, Kepivance®. In 2007, the three products generated combined sales of nearly $70 million.

    Biovitrum is currently carrying out Phase II trials with Kepivance as a treatment for oral mucositis in children and adolescents between one and 16 years. Teh company’s other five commercial products are all marketed in Nordic countries. Biovitrum achieved 2009 revenues of SEK 1.2 billion (approximatelt $171.64 million) and was about break even at EBIT level.

     



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