Concordia Healthcare to acquire Covis Pharma commercial assets for $1.2B
Concordia Healthcare, a Canada-based diverse healthcare company focused on legacy pharmaceutical products, orphan drugs and medical devices for the diabetic population, will acquire substantially all of the commercial assets of privately held Covis Pharma and Covis Injectables, headquartered in Zug, Switzerland, for $1.2 billion in cash.
The Covis drug portfolio being acquired consists of 18 branded and authorized generic products with stable revenue, strong margins and free cash flow. The distinctive product portfolio includes branded pharmaceuticals, injectables and authorized generics that address life-threatening and other serious medical conditions in various therapeutic areas including cardiovascular, central nervous system, oncology and acute care markets. Key products are Nilandron for metastatic prostate cancer, Dibenzyline for pheochromocytoma, Lanoxin for mild-to-moderate heart failure and atrial fibrillation and Plaquenil for lupus and rheumatoid arthritis.
In its fourth quarter of 2014, Covis expects to have revenue between $47 and $52 million related to the portfolio. Overall for 2014, Covis expects revenue of $140 to $145 million with a gross profit margin of approximately 90%.
Concordia believes it can integrate the portfolio it is acquiring into its existing business and leverage its existing infrastructure. Through the elimination of redundant distribution and general and administrative expenses, Concordia expects to recognize immediate synergies of approximately $20 million.
"Covis' strong commercial momentum will have an immediate and material impact on our top and bottom line financial results," said Mark Thompson, CEO of Concordia. "In the longer-term, this transaction creates greater scale and diversification for Concordia, which should support the continued execution of our aggressive growth plans."
The acquisition, expected to close in the second quarter of 2015, is subject to satisfaction of customary closing conditions (including receipt of required regulatory approvals). The boards of directors of all parties have approved the acquisition.