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Lannett Company agreed to purchase Kremers Urban Pharmaceuticals, the US specialty generic-pharmaceuticals subsidiary of global biopharmaceuticals company UCB S.A., for $1.23 billion.
Lannett Company signed a definitive agreement to purchase Kremers Urban Pharmaceuticals Inc. (KU), the US specialty generic-pharmaceuticals subsidiary of global biopharmaceuticals company UCB S.A. (UCB), for $1.23 billion, plus potential contingency payments, the company announced in a Sept. 2, 2015 press release. The transaction, subject to regulatory approval and other customary closing conditions, is expected to close in the fourth quarter of 2015 and has been unanimously approved by the boards of directors of Lannett and UCB.
"For Lannett, this is a transformational acquisition that is an exceptional strategic fit and builds upon our stellar financial performance over the past several years," said Arthur Bedrosian, CEO of Lannett. "With KU, we are adding a highly profitable business and creating a specialty pharmaceuticals company that has substantial size, scale, and reach.
"The acquisition diversifies and augments our current product offerings and significantly enhances our opportunities for continued growth by expanding our pipeline with a number of large market opportunity and complementary product candidates. KU brings considerable manufacturing capacity, a first-class research and development team, and the potential for advancing our active pharmaceutical ingredients business. This transaction delivers on our objective to supplement and boost our organic growth with strategic acquisitions. We will continue to seek opportunities to build our business and enhance shareholder value."
The acquisition adds a diversified commercial product portfolio of 18 products. The combined company generated pro-forma revenues of more than $800 million for the 12 months ended June 30, 2015. KU’s pipeline includes 11 product applications pending at FDA, of which five include Paragraph IV certifications, and 17 product candidates in various stages of development, including one 505(b)(2) product opportunity. KU brings additional research and development and regulatory expertise, particularly in the areas of difficult-to-manufacture products and Paragraph IV certifications. As part of the transaction, Lannett would receive KU's recently inspected 381,000-ft2 facility in Seymour, Indiana, which has substantial manufacturing and warehousing capacity, as well as dedicated product development space.