The specialty pharmaceutical companies Akorn and Hi-Tech Pharmacal have formed an agreement under which Akorn will acquire Hi-Tech for $640 million in cash. The deal, which is subject to customary closing conditions, is scheduled to close in the first quarter of 2014. The combined company will have sales in excess of $500 million, according to an Akorn press statement.
Hi-Tech is a specialty pharmaceutical company developing, manufacturing, and marketing generic and branded prescription and over-the-counter (OTC) products. Hi-Tech specializes in difficult-to-manufacture liquid and semisolid dosage forms and produces and markets a range of oral solutions and suspensions as well as topical ointments and creams, nasal sprays, otics, sterile ophthalmics, sterile ointments, and gels products.
The acquisition strengthens Akorn’s position in generic ophthalmic drugs and also broadens its product offering to include other niche dosage forms such as oral liquids, topical creams and ointments, nasal sprays, and otics. The deal also enhances Akorn’s retail presence in both prescription and OTC products. Akorn says it plans to capitalize on the manufacturing capabilities of Hi-Tech to further expand its presence in the private-label OTC business. On a product basis, Akorn currently has 57 abbreviated new drug applications (ANDAs) filed with FDA, and Hi-Tech has filed 18 ANDAs.
Akorn expects to achieve between $15 million and $20 million in annual run-rate synergies within 12 months of close.