28 March, 2022 – 12:31 By Tony Quested
Eagle Pharmaceuticals in New Jersey has proposed a life-saving deal to acquire cash-strapped Cambridge company Acacia Pharma. Acacia needs to find an estimated $115m extra cash just to break even by early FY2025.
Despite the potential of its pipeline, the company says it has been hammered by Covid-triggered cancellations of surgery at hospitals which would be potential customers.
The Eagle swoop would end the crisis. But it must first be ratified by shareholders and the High Court. Both boards have agreed the deal.
A news release from Acacia reported: “Acacia met its formulary goals for both Barhemsys® and Byfavo® in FY2021 and continues to be encouraged that feedback for both products is indicative of significant future commercial potential.
“However, Acacia’s standalone financial condition has been negatively impacted by physical access limitations caused by the global COVID-19 pandemic and a significant latency of demand due to postponement of surgical procedures.
“Accordingly, Acacia expects it would require a minimum of approximately $115m of additional cash to fund operations to break-even (based on projections assuming break-even by early FY2025).
Eagle has agreed to pay €94.7m ($103,978m) which includes €71.6m cash and the rest in Nasdaq shares which were today trading at just under $47 per share.
The company believes it can leverage the power of both companies’ product portfolios by combining resources and talks of significant financial synergies. The deal would close in late Q2 2022 if backed by Acacia shareholders and the High Court, Eagle says.
The proposed transaction would provide Eagle with two currently marketed, acute care, hospital products with the potential to disrupt the marketplace – Acacia’s BARHEMSYS® and BYFAVO® – together potentially worth billions of dollars if well commercialised.
Scott Tarriff, President and CEO of Eagle Pharmaceuticals said: “We are delighted to announce that we have agreed to terms for the proposed acquisition of Acacia Pharma. This will be a very important acquisition for us, both financially and strategically.
“In recent years, the pharmaceutical industry has witnessed slower uptake of new products and longer ramp periods. In the face of further challenges brought about by the COVID-19 pandemic, many smaller underfunded companies experienced significant hurdles launching products.
“We therefore believe that Eagle is well suited to drive uptake of these two new products, building from Acacia Pharma’s established foundation since its launch, through our experienced and specialised hospital-based sales organisation with minimal additional infrastructure.”
Scott Byrd, chairman of Acacia, added: “I am proud of the progress that Acacia has achieved in bringing Barhemsys® through clinical trials to the market and in the progress it has subsequently made in launching both this product and Byfavo® in the US.
“Both products are designed to address clear and important hospital needs and to date have received positive feedback from customers and strong formulary acceptance, positioning them well for future success.
“However, the global COVID-19 pandemic has resulted in significant and sustained challenges that have significantly disrupted hospital operations, limited access, and dramatically increased the time and investment required for product launches.
“The Acacia board believes this proposed transaction represents an opportunity for Acacia shareholders to realise value for their investment in cash and, through Eagle, retain an interest in the future value that may be generated from Barhemsys® and Byfavo® being part of a larger portfolio of hospital products, in the hands of a well-capitalised company.”
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