Heparin Maker Acquired by German Firm - Pharmaceutical Executive

ADVERTISEMENT

Heparin Maker Acquired by German Firm


PharmExec Direct

The heparin contamination that rocked the industry this spring has apparently paid off for at least one pharma company. APP Pharmaceuticals, the Illinois-based manufacturer that stepped up to supply the blood-thinning drug when contaminated product distributed by Baxter was withdrawn from the market, announced Monday that it is being acquired by Fresenius, a German-based company that specializes in products for patients undergoing dialysis.

The deal will pay APP $23 per share, in cash, or about $3.7 billion total—29 percent premium over the stock's closing value on July 3. If certain performance goals are met, Fresenius will kick in another $6 a share, for a total premium of 63 percent. Fresenius also assumes APP's $940 million in debt. The deal gives Fresenius control of one of the largest manufacturers of FDA-approved injectible heparin with no known instances of contamination.

In March, severe allergic reactions to heparin led to the discovery of a contaminated ingredient originating from a Chinese manufacturing plant owned by American Capital Strategies. While other heparin makers, like Baxter, scrambled to find out what caused the contamination, APP began ramping up its facilities to produce enough heparin to meet the pending shortage. The company received FDA approval at all three of its plants, and even began manufacturing in the US. According to APP, its heparin brought in sales between $30 million and 40 million in 2007. Since April's shortage, APP has nearly tripled the price of the drug.

"Now we feel comfortable that we have the supply, and as a company we have been working very closely with USP [United States Pharmacopeia] in terms of setting new standards," said Patrick Soon-Shiong, founder and chairman of APP.

Currently, there are few heparin alternatives available, and one option—low weight, molecular heparin—doesn't have an antidote for excess bleeding, making it useless in hospitals.

"Heparin has been around for many years, and had eroded to the point where it was more expensive to make it than to sell it," Soon-Shiong told investors and reporters on Monday. "To meet the current needs, we manufacture about 12 million vials a month, compared to previous average of 3 to 4 million."

According to Soon-Shiong, APP will continue to act as a stand-alone company, and its products will continue to be sold under the APP brand name. Fresenius also said that the company will keep APP's senior and management staff intact.

"The merger with Fresenius will allow for the rapid globalization of APP's portfolio with the same high levels of quality and patient commitment, while at the same time providing a more complimentary and comprehensive offering of injectible pharmaceuticals combined with devices and delivery systems to customers worldwide," Soon-Shiong said.

ADVERTISEMENT

blog comments powered by Disqus

Source: PharmExec Direct,
Click here