April 13, 2015
By Alex Keown, BioSpace.com Breaking News Staff
MISSISSAUGA, Ontario -- Cipher Pharmaceuticals Inc. struck a $45.5 million deal to acquire INNOCUTIS Holdings LLC, a privately held specialty dermatology company, giving the Canadian company a foothold in the United States, the company announced Monday morning.
Established in 2000, Cipher Pharmaceuticals (CPHR), a spinoff of CML Healthcare, is a specialty pharmaceutical dermatology company with a portfolio of commercial-stage products that is on pace to achieve its goal of becoming the most customer-centric dermatology company in North America. The acquisition of INNOCTIS brings 31 seasoned sales people familiar with the U.S. markets into the Cipher family.
“This acquisition marks our commercial entry to the U.S. market and represents an important step toward our goal of creating a leading North American dermatology business,” Shawn O’Brien, Cipher’s chief executive officer said in a press release announcing the deal with INNOCTIS, which posted about $10.1 million in net product revenue in 2014. “We see excellent opportunity to drive increased sales and profitability by growing their current branded prescription products.”
News about the transaction pushed Cipher’s stock up to $11.05 per share, up from its close of $8.58 per share.
In addition to the $45.5 million in upfront payments, Cipher could dole out an additional $3 million in milestone payments over the next three years. INNOCUTIS’ current portfolio consists of established prescriptions, including Sitavig, a treatment for herpes labialis. Sitavig will be launched in Canada next year, the company said.
The INNOCTIS deal is not the only deal Cipher has made this year. Since January Cipher has completed five transactions, including acquisition of worldwide rights to three products focused on inflammatory dermatological diseases (Dermadexin, Pruridexin, and ASF-1096) from Astion Pharma. Additionally Cipher licensed the Canadian rights to Ozenoxacin, a topical treatment for adult and pediatric patients with impetigo. The company also acquired seven pre-clinical compounds for the treatment of melanoma, skin cancer and other cancers from Melanovus Oncology Inc.
Cipher’s deals are part of the company’s three-pronged growth strategy that includes acquiring dermatology companies and products in the United States, expanding in Canada and acquiring and commercializing “potentially transformative technology.”
Last month Cipher acquired the Canadian distribution rights to CF101, an A3 adenosine receptor to treat moderate to severe plaque psoriasis and rheumatoid arthritis developed by an-Fite BioPharma Ltd. .
Cipher is coming off a strong 2014, where the company posted record revenue of $32.3 million, an increase of 20 percent compared with $27 million in 2013. Revenue was driven by a 42 percent growth in acne-medication Absorica, to $22.5 million, and a 65 percent increase in cholesterol treatment Lipofen, which generated $5.6 million in revenue. Absorica is taking aim at Accutane, developed by Hoffman-La Roche, and generic isisotretinoin formulations in the acne treatment niche.
