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Emergent BioSolutions Acquires GlaxoSmithKline Anthrax Drug for $96 Million

Thursday, July 20, 2017   (0 Comments)
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Gaithersburg-based Emergent BioSolutions has been on a bit of a buying spree lately.

 

On Wednesday, the company announced it would acquire a drug for treating inhaled anthrax from pharmaceutical giant GlaxoSmithKline in an all-cash deal worth up to $96 million.

 

The deal came less than a week after Emergent (NYSE: EBS) announced it would buy French pharmaceutical giant Sanofi's smallpox vaccine business in an all-cash deal worth up to $125 million.

 

"People have been waiting for acquisitions from these guys for a while, so it is good to see," said Frank Brisebois, an analyst for Laidlaw and Company. He was referring to Emergent officials' stated goal to reach $1 billion in top-line sales by 2020. "They weren't going to get there without acquisitions at the rate their sales were going."

 

The majority of Emergent's revenue from products now comes from legacy anthrax vaccine BioThrax, which saw sales of $237 million in 2016, down 19 percent from $293.3 million in 2015. In December, Emergent announced federal deals worth up to $1 billion to supply the Strategic National Stockpile with millions of doses of its anthrax vaccine by 2021.

 

In the deal announced this week with GSK, Emergent will add Raxibacumab, a monoclonal antibody approved by the Food and Drug Administration for the treatment and prophylaxis of inhaled anthrax, to its portfolio.

 

Investors appeared to react favorably to the news. Emergent's share price opened Thursday at $35, up 3 percent from a close of $34.89 on Wednesday. It was trading around $35.40 on Thursday afternoon.

 

The deal with GSK includes an upfront payment of $76 million and up to $20 million in product sale and manufacturing-related milestone payments that would likely become due in 2019. As part of the agreement, Emergent will assume responsibility for a multiyear contract with Biomedical Advanced Research and Development Authority worth up to $130 million to supply the drug to the U.S. Strategic National Stockpile.

 

Under the agreement, Emergent plans to purchase product from GSK to complete deliveries to the stockpile under the existing contract. The company expects to negotiate a follow-on contract with federal government in supplying the anthrax drug to the stockpile. The deal with GlaxoSmithKline is expected to close by the end of this year.

 

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