Jazz Pharmaceuticals has agreed to acquire EUSA Pharma, a privately-held, specialty pharmaceutical company with headquarters in the U.S. and U.K., for $650 million in cash and a potential $50 million milestone payable in cash based upon its lead product, Erwinaze, achieving a specified U.S. net sales target in 2013.

The transaction will provide Jazz Pharmaceuticals with an expanded portfolio of specialty pharmaceutical products and an enhanced commercial platform, incorporating EUSA Pharma's specialty commercial infrastructure in the U.S. and Europe and its international distribution network. The combined organization's portfolio would have products marketed in the U.S. and Europe, including Erwinaze (asparaginase Erwinia chrysanthemi), a life-saving treatment for patients with acute lymphoblastic leukemia (ALL).

The transaction is expected to be immediately accretive to Jazz Pharmaceuticals' adjusted earnings per share upon closing in 2012 and in 2013 is expected to provide additional revenue of $210-$230 million, additional adjusted EBITDA of $75-$85 million, and an additional $0.75-$0.85 in adjusted earnings per share.

"EUSA Pharma is a compelling strategic fit with our specialty focus and commercial expertise, and furthers our mission to improve patients' lives by delivering therapies that address serious unmet medical needs," said Bruce C. Cozadd, chairman and CEO of Jazz Pharmaceuticals. "This transaction will expand our global footprint and marketed product portfolio to include Erwinaze, a treatment for a life-threatening form of leukemia, as well as other highly specialized products.”

EUSA Pharma is a specialty pharmaceutical company founded in 2006, with a portfolio of 10 oncology, critical-care and oncology supportive care products currently marketed directly in the U.S. and Europe and via distributors in other countries. The company's first quarter 2012 net sales were approximately $46 million. Its largest product is Erwinaze, developed as a treatment option for patients with ALL who are hypersensitive to E. coli-derived asparaginase. Erwinaze was approved by the FDA in November 2011, has orphan drug exclusivity through November 2018 and biologic data exclusivity through 2023. It is currently approved in seven countries outside the U.S.

In addition to ongoing development to expand the available methods of Erwinaze administration to include IV delivery, EUSA Pharma's pipeline includes two additional drug candidates: Asparec, a pegylated recombinant Erwinia asparaginase currently in phase I development in Europe for the treatment of ALL in patients with hypersensitivity to standard-of-care E. coli-derived asparaginase therapy; and Leukotac (inolimomab), an anti-CD25 monoclonal antibody in a phase III pivotal study in Europe for treatment of steroid-refractory acute graft versus host disease.

EUSA Pharma's founder, president and CEO, Bryan Morton, will remain with the organization with responsibility for the new international operations.

The acquisition has been approved by the board of directors of both companies and the stockholders of EUSA Pharma. It is subject to the satisfaction of customary closing conditions and regulatory approvals, including antitrust approval in the U.S. The transaction is anticipated to close in June 2012.