OR WAIT null SECS
Patricia Van Arnum was executive editor of Pharmaceutical Technology.
The specialty drug company King Pharmaceuticals is seeking to acquire the specialty pharmaceutical company Alpharma (Bridgewater, NJ) through an unsolicited bid of $33 per share or $1.4 billion in cash. Alpharma has rejected the bid.
Bristol, TN (Aug. 22)-The specialty drug company King Pharmaceuticals is seeking to acquire the specialty pharmaceutical company Alpharma (Bridgewater, NJ) through an unsolicited bid of $33 per share or $1.4 billion in cash. Alpharma has rejected the bid.
In making the move to acquire Alpharma, Brian A. Markison, chairman, president, and CEO of King Pharmaceuticals, said, “The transaction would create a diversified specialty pharmaceutical company with greater commercialization capabilities, an expanded portfolio of pain management products, and a strengthened pipeline, which would include multiple platform technologies.”
Alpharma reported 2007 sales of $722.4 million, a 10% increase from 2006 sales of $653.8 million. Animal-health products accounted for the largest piece of its business: 50.8% of 2007 sales. The company’s recently divested active pharmaceutical ingredient (API) business accounted for 26% of its 2007 sales, and pharmaceuticals represented 23.2%.
Alpharma’s 2007 pharmaceutical revenues were $167.7 million, an increase of 21% over 2006 levels, but the company reported an operating loss in its pharmaceutical division of $61.5 million in 2007. The company’s lead product is “Kadian” (morphine sulfate). Its lead pipeline candidate is “Embeda” (morphine sulfate extended-release with sequestered naltrexone hydrochloride capsules). The company submitted a revised new drug application for Embeda to the US Food and Drug Administration in June 2008. Pending regulatory approval, Alpharma anticipates launching the product in early 2009.
In April 2008, Alpharma divested its API business to the private equity group 3i for $395 million. The business provides third-party manufacturing for a line of fermentation-based APIs and one chemically synthesized API. The sale included manufacturing facilities in Copenhagen, Denmark; Oslo, Norway; Budapest, Hungary; and Taizhou, China.
Deal is stalled
In a letter to Alpharma president and CEO Dean J. Mitchell, Markison said “we are disappointed” that Alpharma rejected the proposal and added that King Pharmaceuticals was willing to discuss all aspects of the proposal, including structures and economics.
In a response to King Pharmaceuticals, Mitchell opened the possibility of considering a higher offer. “We are willing to entertain a proposal from you that we believe more appropriately values the company,” he said.
As of press time, King Pharmaceuticals had not offered a new proposal.