UK's Vectura Buys Skyepharma for $620 Million to Create Powerful Respiratory Company

UK's Vectura Buys Skyepharma for $620 Million to Create Powerful Respiratory Company
March 16, 2016
By Mark Terry, Breaking News Staff

Chippenham, UK-based Vectura Group plc announced today that is acquiring London, UK’s Skyepharma plc in a deal worth $621 million (US).

The combined company will have a market cap of just over 1 billion pounds and will create a company focused on asthma and other lung conditions. Under the deal, Skyepharma stockholders will receive 2.7977 new Vectura shares for every Skyepharma share. This is about a 13.6 percent premium on the average Skyepharma share price over the last 90 days, and about a 4.2 percent premium over Tuesday’s closing price.

Once the deal is closed, Skyepharma shareholders will control about 41.75 percent of the combined company. Skyepharma shareholders will also have the option to take part of the offer in cash.

The merged company will be led by James Ward-Lilley, chief executive officer of Vectura. He is previously a senior executive with AstraZeneca . Vectura’s chairman of the board, Bruno Angelici, will remain in the same position. Skyepharma’s chief executive officer, Peter Grant, will leave the company. Skyepharma’s chairman, Frank Condella, will stay on with the merged company to act as a vice chairman.

“The merger of Skyepharma and Vectura is a highly synergistic, value-enhancing transaction that will establish an industry leader in the development of inhalation products,” said Condella, in a statement.

“2015 has been a year of further substantial progress both operationally and financially,” said Grant in a statement “Our proven expertise in developing innovative inhalation and oral products has given us a track record of growth that reinforces our optimism about the future.”

Skyepharma products include flutiform, a fixed-dose combination of fluticasone proprionate and formoterol fumarate dihydrate in a pressurized Metered Dose Inhaler (pMDI), Geomatrix, and Paxil CR, among others.

Vectura markets Ultibro Breezhaler and Seebri Breezhaler for COPD, partnered with Novartis AG , Advate for Hemophilia A in partnership with Baxter , Anoro Ellipta for COPD licensed with GlaxoSmithKline , and others.

In addition to various breathing treatments, both companies have a number of pipeline products. Vectura has VR315, a generic version of GSK’s respiratory drug, Advair. Approval could occur in 2017. It also has VR475 (Favolir) for severe uncontrolled adult asthma in Phase III trials in Europe, VR876 in Phase III in Europe for serious lung diseases, and QVM149 in Phase III trials in partnership with Novartis for Asthma in Europe and the rest of the world (ROW).

Samir Devani, an analyst and director of Rx Securities, told Reuters that the merger made sense and creates a “one-stop shop” for developing respiratory drugs.

“I would expect to see a number of new holders coming into this stock, given our mid-cap market capitalization with the combination,” James Ward-Lilley told Reuters. “We have today really got the opportunity to be an industry leader in terms of the device and technology focused on inhaled respiratory airway disease.”

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