Emergent BioSolutions Inc. (NYSE: EBS) announced today that it has
entered into an agreement to acquire Adapt Pharma and its flagship
product NARCAN® (naloxone HCl) Nasal Spray, the first and only
needle-free formulation of naloxone approved by the U.S. Food and
Drug Administration (FDA) and Health Canada, for the emergency
treatment of known or suspected opioid overdose as manifested by
respiratory and/or central nervous system depression. Total
consideration for the transaction is up to $735 million consisting
of an upfront payment of $635 million and up to $100 million in
cash for potential sales-based milestones through 2022. The upfront
payment of $635 million consists of $575 million in cash and $60
million in Emergent common stock, all of which are subject to
certain adjustments under the terms of the agreement.
Upon the closing of the transaction, Emergent will acquire the
NARCAN Nasal Spray product and a development pipeline of new
treatment and delivery options to address opioid overdose, and
bring on approximately 50 employees, located in the U.S., Canada,
and Ireland, including those responsible for supply chain
management, research and development, government affairs, and
commercial operations.
Daniel J. Abdun-Nabi, CEO of Emergent BioSolutions, stated, “The
acquisition of Adapt Pharma, and with it the NARCAN Nasal Spray,
the leading community use emergency treatment for opioid overdose,
is directly in line with our mission – to protect and enhance life.
Adding this important life-saving product to our portfolio of
preparedness solutions allows us to apply our experience gained
from two decades of partnering with the U.S. government to
safeguard public health against biological and chemical threats to
address the devastating increase in deaths due to opioid overdoses,
one of the most serious public health threats facing the nation
today.”
“I am delighted that this transaction will bring Adapt and
Emergent together to focus on the opioid crisis - the leading
public health issue of our time. With a shared mission of
protecting lives from public health threats, I am confident that
our combined expertise and resources will accelerate access to
NARCAN Nasal Spray through investments in public awareness and
manufacturing capacity while maintaining a responsible pricing
approach. It will also allow us to progress Adapt’s R&D
pipeline of additional opioid overdose and addiction treatment
options,” said Seamus Mulligan, chairman and chief executive
officer of Adapt. “To maintain the outstanding momentum our team
has generated, Adapt will continue to focus on the opioid crisis as
part of Emergent’s devices business unit and all employees and
facilities will be retained.”
Doug White, senior vice president and head of Emergent’s devices
business unit, said, “According to the Centers for Disease Control
and Prevention, in 2016, there were approximately 42,000 deaths in
the U.S. due to opioid overdose. The U.S. government has declared
the opioid crisis a public health emergency and has identified the
availability and distribution of overdose-reversing drugs, such as
NARCAN Nasal Spray, as one of the strategies to combat this crisis.
We are committed to further expanding awareness and availability of
NARCAN Nasal Spray as a convenient, easy-to-administer emergency
treatment by leveraging the combination of Adapt Pharma’s efforts
with state and local governments, first responders, pharmacies, and
other channels, with Emergent’s 20-year track record as a trusted
partner to the Federal government.”
Strategic RationaleThis transaction supports
the company’s mission, vision, and strategy to grow through the
acquisition of revenue-generating products and businesses that
align with its focus on public health threats. The acquisition of
Adapt Pharma adds NARCAN Nasal Spray to Emergent’s portfolio of
only-in-class products with applications in both government and
commercial markets as well as commercial operations targeting these
markets, including a focus on state and local government
purchasers, first responder groups, retail pharmacies, and opioid
addiction treatment centers as key sales channels. NARCAN Nasal
Spray became commercially available in early 2016 after receiving
FDA approval in November 2015. It also received approval from
Health Canada in October 2016. Adapt Pharma is also developing new
treatment and delivery options to address opioid overdoses.
In April 2018, the U.S. Surgeon General released a public health
advisory to urge more Americans to carry naloxone, a potentially
life-saving medication, that can reverse the effects of an opioid
overdose. As a result, the NARCAN Nasal Spray is carried by many
first responders including police officers, firefighters, and
emergency medical teams. The Surgeon General has recommended that
more individuals, including family, friends and those who are
personally at risk for an opioid overdose, keep the drug on hand.
Additionally, laws have been passed in all 50 states and the
District of Columbia to increase public access to naloxone.
Standing orders in states allow trained personnel such as
pharmacists or staff of a community health center to distribute
naloxone without an individual prescription from a doctor.
From a financial perspective, the company expects the
incremental revenue contribution in 2019 from the acquisition to be
between $200 million and $220 million. The company also anticipates
that the transaction will be accretive to adjusted net income and
EBITDA in 2019.
The company further expects that, with the completion of this
acquisition and the recently announced acquisition of PaxVax, it
will achieve or exceed its growth plan goal of $1 billion in
revenue in 2020.
Financing and Transaction ApprovalsTo fund the
cash portion of the acquisition, Emergent will use a combination of
cash-on-hand, its existing $200 million credit facility, and
borrowings pursuant to a new $600 million debt financing commitment
provided by Wells Fargo Bank, National Association. The
transaction, which is subject to customary closing conditions,
including antitrust regulatory approval, is expected to close in
the fourth quarter of 2018.
Covington & Burling LLP acted as legal counsel and Morgan
Stanley & Co. LLC acted as financial advisor to Emergent. Mayer
Brown LLP acted as legal counsel and BofA Merrill Lynch acted as
financial advisor to Adapt Pharma.
Conference Call and Webcast Emergent will host
a conference call to discuss this acquisition on August 28, 2018 at
5:00 p.m. eastern. The conference call will be accessible by
dialing (855) 766-6521 (US/Canada) or (262) 912-6157
(International) and providing conference ID: 2459805. The call will
also be webcast, accessible from the company’s website at
www.emergentbiosolutions.com, under “Investors.”
A replay of the conference call will be accessible,
approximately one hour following the conclusion of the call, by
dialing (855) 859-2056 (US/Canada) or (404) 537-3406
(International) and using conference ID: 2459805. The replay will
be available through September 11, 2018 on the company’s website
www.emergentbiosolutions.com, under “Investors.”
About NARCAN® Nasal Spray
4mgNARCAN® Nasal Spray 4mg is the first and only
FDA-approved, needle-free formulation of naloxone for the emergency
treatment of a known or suspected opioid overdose. It does not
require assembly or any specialized medical training and is also
the highest concentrated dose of intranasal naloxone currently
available. NARCAN® Nasal Spray is not a substitute for emergency
medical care, and additional doses of NARCAN® Nasal Spray may be
required until emergency medical assistance arrives. Seek emergency
medical assistance immediately after initial use, keeping the
patient under continued surveillance.
Please see Indications and Important Safety Information
below.
IndicationsNARCAN® (naloxone hydrochloride)
Nasal Spray is an opioid antagonist indicated for the emergency
treatment of known or suspected opioid overdose, as manifested by
respiratory and/or central nervous system depression. NARCAN® Nasal
Spray is intended for immediate administration as emergency therapy
in settings where opioids may be present. NARCAN® Nasal Spray is
not a substitute for emergency medical care.
Important Safety InformationNARCAN® (naloxone
HCl) Nasal Spray is contraindicated in patients known to be
hypersensitive to naloxone hydrochloride or to any of the other
ingredients.
Seek emergency medical assistance immediately after initial use,
keeping the patient under continued surveillance.
Risk of Recurrent Respiratory and CNS Depression: Due to the
duration of action of naloxone relative to the opioid, keep the
patient under continued surveillance and administer repeat doses of
naloxone using a new nasal spray with each dose, as necessary,
while awaiting emergency medical assistance.
Risk of Limited Efficacy with Partial Agonists or Mixed
Agonists/Antagonists: Reversal of respiratory depression caused by
partial agonists or mixed agonists/antagonists, such as
buprenorphine and pentazocine, may be incomplete. Larger or repeat
doses may be required.
Precipitation of Severe Opioid Withdrawal: Use in patients who
are opioid dependent may precipitate opioid withdrawal
characterized by body aches, fever, sweating, runny nose, sneezing,
piloerection, yawning, weakness, shivering or trembling,
nervousness, restlessness or irritability, diarrhea, nausea or
vomiting, abdominal cramps, increased blood pressure, and
tachycardia. In some patients, there may be aggressive behavior
upon abrupt reversal of an opioid overdose. In neonates, opioid
withdrawal may be life-threatening if not recognized and properly
treated and may also include convulsions, excessive crying, and
hyperactive reflexes. Monitor for the development of opioid
withdrawal.
Risk of Cardiovascular (CV) Effects: Abrupt postoperative
reversal of opioid depression may result in adverse CV effects.
These events have primarily occurred in patients who had
pre-existing CV disorders or received other drugs that may have
similar adverse CV effects. Monitor these patients closely in an
appropriate healthcare setting after use of naloxone
hydrochloride.
Adverse Reactions: The following adverse reactions were observed
in a NARCAN® Nasal Spray clinical study: increased blood pressure,
constipation, toothache, muscle spasms, musculoskeletal pain,
headache, nasal dryness, nasal edema, nasal congestion, nasal
inflammation, rhinalgia, and xeroderma.
To report SUSPECTED ADVERSE REACTIONS, contact ADAPT Pharma,
Inc. at 1-844-4-NARCAN (1-844-462-7226) or FDA at 1-800-FDA-1088 or
www.fda.gov/medwatch.
Please see full Prescribing Information at:
https://www.narcan.com/pdf/NARCAN-Prescribing-Information.pdf.
For additional information on NARCAN® Nasal Spray, please visit
www.NARCAN.com.
For questions regarding NARCAN® Nasal Spray distribution, please
call 1-844-4-NARCAN (462-7226).
About Emergent BioSolutionsEmergent
BioSolutions Inc. is a global life sciences company seeking to
protect and enhance life by focusing on providing specialty
products for civilian and military populations that address
accidental, intentional, and naturally occurring public health
threats. Through our work, we envision protecting and enhancing 50
million lives with our products by 2025. Additional information
about the company may be found at emergentbiosolutions.com. Find us
on LinkedIn and follow us on Twitter @emergentbiosolu and Instagram
@life_at_emergent.
Safe Harbor StatementThis press release
includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Any statements,
other than statements of historical fact, including statements
regarding the expected closing of the Adapt Pharma transaction, the
potential opportunities and financial impact of the Adapt Pharma
transaction and recently announced acquisition of PaxVax, and any
other statements containing the words “believes,” “expects,”
“anticipates,” “intends,” “plans,” “targets,” “forecasts,”
“estimates” and similar expressions in conjunction with, among
other things, discussions of the amount and timing of additional
revenue expected to be generated by NARCAN Nasal Spray and the
timing of accretion by such product, expanding the awareness and
availability of the NARCAN Nasal Spray product, the ability of the
company to achieve its 2020 financial and operational growth plan
goals, the company's outlook, financial performance or financial
condition, growth strategy, product sales, product development
regulatory approvals or expenditures are forward-looking
statements. These forward-looking statements are based on our
current intentions, beliefs and expectations regarding future
events. We cannot guarantee that any forward-looking statement will
be accurate. Investors should realize that if underlying
assumptions prove inaccurate or unknown risks or uncertainties
materialize, actual results could differ materially from our
expectations. Investors are, therefore, cautioned not to place
undue reliance on any forward-looking statement. Any
forward-looking statement speaks only as of the date of this press
release, and, except as required by law, we do not undertake to
update any forward-looking statement to reflect new information,
events or circumstances.
There are a number of important factors that could cause the
company’s actual results to differ materially from those indicated
by such forward-looking statements, including uncertainties as to
the satisfaction of closing conditions with respect to the
transactions, including the timing and receipt of third party and
regulatory approvals related to the Adapt Pharma and PaxVax
transactions; our ability to successfully integrate the business
and realize the benefits of the Adapt Pharma and PaxVax
transactions, including our ability to continue the momentum of the
sales of NARCAN Nasal Spray and sales of PaxVax’s products; whether
anticipated synergies and benefits from the either acquisition are
realized within expected time periods, if at all; our ability and
the ability of our contractors and suppliers to maintain compliance
with current good manufacturing practices and other regulatory
obligations; the impact of pharmaceutical industry regulation in
the United States and internationally; and new products and patents
attained by competitors.
The foregoing sets forth many, but not all, of the factors that
could cause actual results to differ from our expectations in any
forward-looking statement. Investors should consider this
cautionary statement, as well as the risk factors identified in our
periodic reports filed with the SEC, when evaluating our
forward-looking statements.
Investor Contact:Robert G. BurrowsVice
President, Investor Relations240-631-3280BurrowsR@ebsi.com
Media Contacts:Lynn KiefferVice President,
Corporate Communications 240-631-3391KiefferL@ebsi.com
Miko NeriSenior Director, Corporate
Communications240-938-6296NeriM@ebsi.com
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