Ireland-based Jazz Pharmaceuticals seals the deal with Celator for $1.5bn tie-up
The big pharma consolidation wagon keeps on rolling…
Ireland-based Jazz Pharmaceuticals has struck a deal to buy US firm Celator Pharmaceuticals in a cash deal valued at about $1.5bn (£1bn).
The deal will give Jazz access to one of Celator's promising treatments for leukaemia but Celator is has yet to garner any revenue from the drug.
Jazz is paying an eye-watering 72 per cent premium on Celator’s share price, plumping for $30.25 a share, from the previous close of $17.53.
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Celator announced positive results for a clinical trial of a leukemia drug, Vyxeos, just three months ago, and has been granted so-called orphan drug status – for treatment of rare conditions – by Europe and US regulators.
Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals, said:
As Celator is currently preparing a regulatory submission in the US for Vyxeos, this acquisition would add a new orphan product with the potential for short and long-term revenue generation and expansion of our international commercial platform.
The transaction is subject to regulatory approval, and comes shortly after the Obama administration in the US took aim at a tie up between Pfizer and Allergan that would have seen Pfizer move its headquarters to Ireland for tax reasons.
A tax inversion deal with Azur Pharma in 2012 prompted Jazz to reincorporate in Ireland.
Jazz had nearly $1bn in cash as of 31 March and a market cap of about $9bn.
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Scott Jackson, chief executive officer of Celator Pharmaceuticals, said:
We believe that Jazz Pharmaceuticals' clinical and commercial expertise in hematology/oncology and existing international infrastructure will help realise the value of Vyxeos as a treatment to patients with AML.
After thoroughly evaluating our strategic options, our board of directors has unanimously determined that this all-cash transaction is in the best interest of our stockholders.
The planned combination of Jazz and Celator is highly complementary, as both companies are dedicated to bringing differentiated therapies to patients who have high unmet medical needs.
The deal is dependant on investors agreeing to sell a majority of Celator’s outstanding shares to Jazz, and the deal is expected to close in the third quarter of this year.