Vectura Group and Skyepharma have agreed to a £441.3 million ($621.4 million) merger that will create a combined company specializing in respiratory treatments.
“The merger of Vectura and Skyepharma is a key milestone in the execution of our strategy to become a leading specialty pharmaceutical company, focusing on airways-related disease,” Vectura Chairman Bruno Angelici said in a statement.
Angelici will be chairman of the combined company, whose CEO will be Vectura CEO James Ward-Lilley.
Vectura and Skyepharma cited the combined company’s breadth of inhalation platforms [dry powder inhalers (DPIs), pressurized metered-dose inhalers (pMDIs), and smart nebulizers) in a global inhaled respiratory drug market whose value has been estimated at $35 billion in 2015: “The Vectura Board and the Skyepharma Board both believe this extensive capability will allow the Enlarged Group to develop a broad range of next generation devices and products more rapidly.”
The companies also cited their range of marketed products now being commercialized through collaboration partners—products that include flutiform®, Seebri® Breezhaler®, Ultibro® Breezhaler®, Breo®/Relvar®b Ellipta®, Anoro® Ellipta®, Incruse® Ellipta®, and AirFluSal® Forspiro®.
Vectura and Skyepharma also said the merger will enhance their ability to develop and commercialize its own respiratory products, particularly in the U.S., including the FAVORITETM smart nebulizer platform and the drug/device combination treatments VR475 (FAVOLIR®), in Phase III for severe uncontrolled adult asthma, and VR647 (SCIPE), in Phase II for pediatric asthma, as well as other treatments such as the chronic obstructive pulmonary disease (COPD)/smoking asthma candidate SKP-2075.
The companies acknowledged they plan to carry out “synergies” designed to cut costs and eliminate duplication of approximately £10 million ($14 million) per year, to be fully realized by 2018. That estimate includes £8 million ($11 million) in lower operating costs and £2 million ($3 million) in reduced administrative costs.
The cost-cutting will result in the elimination of “approximately 61” full-time equivalent positions, Vectura and Skyepharma said.
Skyepharma shareholders would receive 2.7977 Vectura shares for each of their current shares. Vectura will spend 410.15p ($5.77) per Skyepharma share—a 13.6% premium to the average Skepharma share price over the past 90 days and a 4.2% premium over Tuesday’s closing price, the companies said.
Once the merger is completed, Skyepharma shareholders will own 41.75% of the combined company—a percentage that could be reduced through a partial cash alternative to the all-share offer up to a maximum amount of £70 million ($98.6 million).
Following completion of the merger, Skyepharma Chairman Frank Condella will serve as vice chairman of the merged company, whose CFO will be Skyepharma CFO Andrew Derodra.
Derodra will be an executive director of the combined company, as will Ward-Lilley, and Vectura COO Trevor Phillips. Skyepharma's CEO Peter Grant and Vectura CFO Andrew Oakley will leave the combined company on terms to be agreed.
“The Vectura Board and the Skyepharma Board both believe that bringing together the two groups will create a stronger scaled business which has the ability to accelerate the delivery of both companies' strategic objectives and deliver greater revenues and value,” the companies said in a statement.