Emergent BioSolutions Acquires Adapt Pharma in $735 Million Deal
Under the terms of the deal, Emergent will pay $635 million up front and up to $100 million in cash for various sales-based milestones through 2022. The upfront payment is $575 million in cash and $60 million in Emergent common stock.
As part of the takeout, Emergent picks up Adapt’s Narcan (Naloxone HCl) Nasal Spray, the only nasal form of naloxone for emergency treatment of known or suspected opioid overdose approved by the U.S. Food and Drug Administration (FDA). Naloxone is otherwise injected via syringe.
Emergent indicates that with this deal and the recently announced acquisition of PaxVax, it will hit or exceed its growth plan goal of $1 billion in revenue in 2020.
“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,” said Daniel J. Abdun-Nabi, Emergent BioSolutions’ chief executive officer, in a statement. “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.”
Reuters notes that Narcan is often carried by police officers and medical teams. The U.S. Centers for Disease Control and Prevention (CDC) indicates that the opioid epidemic took over 42,000 lives in 2016.
Reuters writes, “President Donald Trump in March recommended the death penalty for drug dealers after declaring the addiction crisis a public health emergency in October. Trump also introduced an Adapt Pharma executive, Mike Kelly, during an event in New Hampshire and said he wanted to give first responders access to life-saving drugs that can reverse overdoses.”
Emergent indicates it has no plans to change Narcan’s price and would continue the 40 percent discount to state and local governments and non-profit organizations. In a conference call with analysts, an Emergent executive said, “Adapt has put together a strong, durable supply chain of partners to support the manufacture of the product. We do not intend to disrupt that.”
Emergent was founded in 1998, and in 2017, reported sales of $561 million. Its products include vaccines for smallpox and anthrax.
“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,” said Seamus Mulligan, chairman and chief executive officer of Adapt, in a statement. “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. 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.”