Emergent BioSolutions Buys PaxVax for $270 Million

Emergent BioSolutions, headquartered in Gaithersburg, Maryland, inked a deal to buy PaxVax, based in Redwood City, California, for $270 million in cash.

PaxVax, which is majority-owned by an affiliate of Cerberus Capital Management, focuses on specialty vaccines against existing and emerging infectious diseases. As part of the deal, Emergent picks up Vivotif, the only oral vaccine licensed by the U.S. Food and Drug Administration (FDA) to prevent typhoid fever. Vivotif is licensed for sale in 27 countries.

Emergent also acquires Vaxhora, a vaccine against cholera, a vaccine candidate developed for the U.S. Department of Defense against Adenovirus 4/7 and clinical-stage vaccine candidates for the military for Chikungunya and other emerging infectious diseases. It will also take over PaxVax’ European-based cGMP biologics manufacturing facilities and about 250 staffers.

“The acquisition of PaxVax solidifies our position as a global leader in the public health threats market, expands our portfolio of only-in-class products, advances our growth strategy, and progresses us towards the achievement of our 2020 financial and operational goals,” said Daniel J. Abdun-Nabi, chief executive officer of Emergent, in a statement. “Importantly, we believe this acquisition will contribute incremental 2019 revenues of $70 million to $90 million and be accretive by the end of 2019. We look forward to continuing to drive growth in the business by building on the successes of PaxVax in the travelers markets, leveraging our core competencies in government contracting and manufacturing, and advancing the development pipeline while remaining disciplined in our approach to R&D.”

In May, the FDA granted PaxVax Fast Track designation for its vaccine to the Chikungunya virus. The virus spreads through mosquito bites and can cause large outbreaks, although not generally seen in the U.S. They have occurred in Africa, Asia, Europe, and the Indian and Pacific Oceans. In 2013, the virus was seen in the Caribbean for the first time. Cases were reported in 2016 and 2017 in the U.S., Italy and France. Symptoms include fever, joint pain, headache, muscle pain, joint swelling, or rash. The symptoms are compared to those of dengue fever and Zika.

The vaccine was licensed from the National Institute of Allergy & Infectious Diseases (NIAID) at the National Institute of Health (NIH). It had recently enrolled its first patient in its Phase IIb dose-ranging trial, built on a Phase IIa trial by the NIH with 400 patients.

Of the acquisition, Brett Ingersoll, head of Global Private Equity and senior managing director of Cerberus said in a statement, “PaxVax provided a compelling opportunity for us to partner with a talented management team and help scale a leading specialty vaccine platform in a large unmet market. Since our investment in 2015, PaxVax has accelerated its financial performance as well as achieved significant operational accomplishments, including the launch of its second product. PaxVax has been a successful investment for Cerberus, generating strong returns for our investors, and is consistent with our long and positive track record of investing in the pharmaceutical sector. We are confident PaxVax will continue its great momentum as part of Emergent.”