Regulatory News:
Meda (STO:MEDAA) has signed an agreement to acquire Valeant’s
pharmaceutical business in Western and Eastern Europe. The acquisition
will benefit Meda in many different respects, both short term and long
term. It will give Meda the entry into Russia. In Eastern Europe, it
means a potential for significant market synergies with products in
Meda’s existing pipeline. In Western Europe, Meda’s position will be
strengthened, especially in the UK. The majority of the acquired
products are also within Meda’s key therapy areas; neurology and
dermatology, which in-line with the company’s focused approach will
offer good synergies.
The total sales level of the acquired business is 1 100 MSEK, of
which Eastern Europe account for 200 MSEK. Major markets are Germany,
UK, Italy, Spain and Russia, both in terms of sales and employees.
Total headcount is 380 employees. The 230 employees in marketing and
sales primarily visit specialists within dermatology and neurology.
The regional headquarter is based in Basingstoke, UK.
“I’m really glad that we have reached this deal with Valeant. This
acquisition has a perfect fit with our operations in Europe. It also
gives a very important contribution to our strategy to become stronger
in Eastern Europe. We now get a foothold in Russia and we will use
that platform to introduce many of our pipeline products. We also look
forward to a long term collaboration in other areas with Valeant”,
says Anders Lonner, CEO Meda.
Russian entry
The Russian pharmaceutical market is worth around 6 billion USD
and growing rapidly. At present, only a few Meda products are sold in
the Russian market. Valeant’s operation in Russia has grown quickly
during the last years. A strong marketing organisation has been
established and Meda’s plan is to expand this platform when Meda’s
current and future products will be launched.
Synergies
Meda foresees synergy effects both on cost and revenue side when
integrating organisations in Western Europe. In Eastern Europe, Meda’s
position in turnover will double. Several new countries in Eastern
Europe are also entered, Russia being the largest. In these new
markets, Meda will now be able to launch certain existing products and
products from its pipeline through own organisations. Synergies within
marketing will also be possible since both companies have
complementary products in both neurology and dermatology.
Product portfolio
Valeant’s product portfolio consists of many well established
products. The majority are specialist products in the key therapeutic
areas; neurology and dermatology. A dominant part of the acquired
products have strong trademarks and are well proven since a long time.
Neurology
Mestinon (pyridostigmine bromide) is used in the treatment of
myasthenia gravis. Myasthenia gravis is a chronic neuromuscular,
autoimmune disorder that causes varying degrees of fatigable weakness
in muscles. Sales during 2007 were about 210 MSEK.
Tasmar (tolcapone) is used in combination with levodopa and
carbidopa for the treatment of patients with severe Parkinson’s
disease. Sales during 2007 were approximately 40 MSEK. Market
synergies exist with Meda’s Parlodel (treatment of Parkinson’s
disease).
Dermatology
Solcoseryl (haemodialysate) is used for treating trophic
disorders, dry and wet wounds. The product is used in a variety of
medical fields that includes neurology and surgery. Sales during 2007
were approximately 140 MSEK.
Dermatix is a transparent, topical silicone gel that helps
maintain the skin’s moisture balance, improving the appearance and
size of scars. Sales during 2007 were approximately 80 MSEK.
Efudix is indicated for topical treatment of multiple actinic or
solar keratosis and superficial basal cell carcinoma. Sales during
2007 were 50 MSEK and market synergies exist with Meda’s Aldara.
Cancer
Cesamet (nabilone) is used for treating patients with
chemotherapy-induced nausea and vomiting (CINV) who fails to respond
adequately to conventional antiemetic treatments. Market synergies
exist with Meda’s BEMA-Fentanyl which is in registration phase
(treatment of breakthrough pain in cancer patients).
Financial effects and profitability
In line with earlier acquisitions, the intention is to quickly
integrate Valeant into Meda and thereby create a stronger company.
This will involve non-recurring restructuring costs that will affect
the operating profit in the near term while the future profitability
can increase.
The EBITDA margin of the acquired business was around 14% during
2007. As a consequence of the industrial integration, the ambition is
to increase this to above 30%. Based on the proposed financing, and
excluding non-recurring restructuring costs, the acquisition is
expected to be accretive to Meda’s earnings per share already during
2009.
Financing and timetable
Meda will pay to Valeant 392 MUSD in cash on a debt free basis,
which is equivalent to around 2 times sales for the acquired business.
Closing of the transaction is dependent on antitrust approvals.
Initially, the purchase will be financed via bank loans. Meda’s board
of directors intends to take a decision to propose a new
preferential-rights share issue for existing shareholders to raise
approximately 1 500 MSEK. The details of this proposed issue will be
announced before an extraordinary shareholders’ meeting. The new share
issue is 100% guaranteed by Stena AB.
MEDA AB (publ) is an international specialty pharma company that
concentrates on marketing and market-adapted product development.
Acquisitions and long-term partnerships are fundamental factors that
drive the company’s strategy. Meda is represented with own
organisations in 26 countries and with more than 1 500 employees
within marketing and sales. Meda’s products are sold in approximately
120 countries world-wide. The Meda share is listed under Large Cap on
the OMX Nordic Stock Exchange. Find out more, visit www.meda.se.
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