AstraZeneca to acquire Omthera Pharmaceuticals for as much as $443 million

LONDON—AstraZeneca on May 28 announced that it had entered into a definitiveagreement to acquire Omthera Pharmaceuticals, a specialty pharmaceuticalcompany based in Princeton, N.J., focused on the development andcommercialization of new therapies for dyslipidemia.

 

Under the terms of the agreement, AstraZeneca will acquire Omtherafor $12.70 per share, or approximately $323 million, which has an enterprise value of approximately $260 million after incorporatingOmthera's cash balances of approximately $63 million. This represents apremium of 88 percent on Omthera's closing price on May 24.

 

Inaddition to the cash payment, each Omthera shareholder will receive contingent value rights of as much as approximately $4.70 per share, or another $120 million in total, if specified milestonesrelated to Epanova are achieved, or if a milestone related to globalnet sales is achieved. Should this happen, the total cost to acquire Omthera would be approximately $443 million.

 

The deal comes at an important time for both companies. A couple months ago, Omertha's initial public offering fell a bit flat on Wall Street, so the AstraZeneca deal could serve to soothe that pain. Meanwhile, as marker-watchers have noted, AstraZeneca has one of the more hard-hit pipelines in Big Pharma thanks to patent expirations and  a dearth of new candidates, so snagging Omertha's candidates could help that. Also, cardiovascular is reportedly a key area that AstraZeneca seeks to build up.

 

Epanova is Omthera's investigational product for the potentialtreatment of patients with very high triglycerides. It is a novel omega-3free fatty acid composition that has been shown to bolster levels ofeicosapentaenoic acid and docosahexaenoic acid significantly in theblood and, in studies to date, it has been shown to reduce triglyceridelevels and improve other key lipid parameters. It is expected toincrease convenience for patients by providing both two and four gramonce-a-day doses with or without meals.

Omthera has completed pharmacokinetic and Phase III clinical studiesto investigate the safety and efficacy profile of Epanova. In 2012, Omthera reported positiveresults from two Phase III trials (EVOLVE and ESPRIT) examining theeffectiveness of Epanova in lowering very high triglycerides, and inreducing non-HDL cholesterol in combination with a statin for patientswith high triglycerides. Both trials were conducted under a SpecialProtocol Assessment with the U.S. Food and Drug Administration.

 

Omthera is expected to file a new drug application (NDA) in the United Statesfor Epanova in mid-2013 for patients with severe hypertriglyceridemia(triglyceride levels greater than or equal to 500mg/dL), with regulatoryfilings in other markets to follow. AstraZeneca aims to file asupplemental NDA as soon as possible for Epanova as a treatment forpatients with mixed dyslipidemia (triglyceride levels of 200-499mg/dl),as well as in a fixed dose combination with Crestor (rosuvastatincalcium) for those mixed dyslipidemia patients at high risk of acardiovascular event. AstraZeneca intends to pursue a large-scalecardiovascular outcomes trial for Epanova in combination with statins.

 

"Thenumber of people with elevated triglyceride levels is rising rapidlyacross the world, due in part to the increasing prevalence of obesityand diabetes," said Pascal Soriot, CEO of AstraZeneca. "There is a clear need for effective and convenientalternatives to some of the existing treatments. Epanova offers realpotential both as a distinctive monotherapy for the treatment ofhypertriglyceridemia and in combination with Crestor for patients athigh risk of adverse cardiovascular events. This is an excitingacquisition that clearly complements our existing portfolio incardiovascular and metabolic disease, one of our core therapy areas."

 

Noting AstraZeneca's  "proven track record in thedevelopment and commercialization of global brands in the area ofcardiovascular disease," Gerald L. Wisler president, CEO, board member, and co-founder ofOmthera, added, "We believe strongly that AstraZeneca canmaximize the value of Epanova not only as a monotherapy treatment fordyslipidemia but also as a treatment for cardiovascular disease incombination with Crestor."

 

The board of directors of Omthera has unanimously approved the termsof the agreement, and has recommended that its shareholders approve thetransaction. AstraZeneca's board has also approved the terms of theagreement. Subject to the approval of Omthera's shareholders as well asother conditions including customary regulatory approvals, thetransaction is expected to close in the third quarter of 2013.