Given Lannett reported sales of $99 million and EPS of $0.91 last quarter, leading to the company issuing guidance for sales of at least $425 million in fiscal 2016, this deal has a chance to significantly increase Lannett’s financial results.
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A Philadelphia generic drugmaker has agreed to buy a Princeton-based specialty generic pharmaceutical company for $1.23 billion, it announced.
“Kremers Urban has been an important enabler building UCB’s core business”. “With KU, we are adding a highly profitable business and creating a specialty pharmaceuticals company that has substantial size, scale and reach”.
Read the full story here. Both companies’ boards unanimously approved the sale, and the deal is expected to close during Q4 2015.
Shares of Lannett rose about 20% in after-hours trading yesterday after the purchase announcement. Its main drug is a generic form of Johnson & Johnson’s Concerta, used to treat attention deficit hyperactivity disorder. Kremers Urban’s pipeline includes 17 candidates (including 8 controlled substances) and 11 applications pending FDA approval, of which 5 are Paragraph IV filings.
Belgian pharmaceutical company UCB, which acquired Kremers Urban when it bought Schwarz Pharma in 2006, tried to sell it previous year to private-equity firms Advent worldwide and Avista Capital Partners for $1.53 billion.
Lannett said on Wednesday it planned to fund the acquisition through a combination of term loans and cash on hand.
In June, Lannett added liquid manufacturing and over-the-counter products to its portfolio with pickup of Silarx Pharmaceuticals for an undisclosed amount. Debevoise & Plimpton LLP and Fox Rothschild LLP are serving as legal advisers.
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Lannett ($LCI) will reap quick payoffs from the deal, including tax benefits of more than $100 million.
