The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Monday Deal Review: June 3, 2013

Welcome to your Monday Biotech Deal Review for June 3, 2013! The past week’s major news was Valeant’s major acquisition of Bausch + Lomb for a combined debt and equity amount of $8.7 billion, bolstering its ophthalmology business heavily. Bausch + Lomb will retain its name and become a division of Valeant, withValeant’s existing ophthalmology businesses being integrated into the newdivision. The transaction creates a global eye health business with estimated pro forma 2013 net revenue of more than $3.5 billion. The acquisition is suggested to be a response to growing eye health trends driven by an aging patient population, an increased rate of diabetes and demand from emerging markets. 

Also on the M&Eh front, Resverlogix is continuing with their proposed spin out to Zenith, as covered last week. The shareholders of Resverlogix approved the special resolution required to conduct the spin out. 

Meanwhile, Angiotech is distributing the proceeds it received from the sale of its Interventional Products business to shareholders, and RepliCel signed an agreement with the cosmetic giant Shiseido for the development and licensing of hair regrowth technology pioneered by RepliCel.

Get the scoop on these deals and many more by hitting the break!

M&Eh

Valeant Pharmaceuticals International, Inc. (NYSE: VRX, TSX: VRX)and Bausch + Lomb Holdings Incorporated, the global eye health company, today announced that they have entered into a definitive agreement under which Valeant will acquire Bausch + Lomb for $8.7 billion in cash.  Under terms of the agreement, which was unanimously approved by the Board of Directors of both companies, Valeant will pay aggregate consideration of $8.7 billion in cash, of which approximately $4.5 billion will go to an investor group led by Warburg Pincus and approximately $4.2 billion will be used to repay Bausch + Lomb’s outstanding debt. Valeant expects to achieve at least $800 million in annual cost savings by end of 2014. Bausch + Lomb expects to have revenues of approximately $3.3 billion and adjusted EBITDA in 2013 of approximately $720 million. The transaction is expected to be immediately accretive to Valeant’s cash earnings per share. Assuming the transaction occurred on January 1, 2013 and assuming the full realization of synergies, the acquisition would have been approximately 40% accretive to Valeant’s expected 2013 Cash EPS.  The transaction will be financed with debt and approximately $1.5 – $2.0 billion of new equity. Valeant has secured fully committed debt financing for the transaction from Goldman Sachs Bank USA. Taking into account the anticipated equity raise, Valeant’s debt to pro forma adjusted EBITDA ratio will be approximately 4.6 times.

Resverlogix Corp. (TSX:RVX) announced that holders of common shares of Resverlogix have approved the special resolution relating to the proposed spin-out of RVX Therapeutics Inc. to Zenith Epigenetics Corp. (formerly 1741273 Alberta Ltd.), pursuant to a plan of arrangement under the Business Corporations Act (Alberta).  Upon completion of the arrangement, shareholders of Resverlogix will own one common share of Resverlogix and one common share of Zenith for each common share of Resverlogix held immediately prior to the arrangement becoming effective. The arrangement was approved by approximately 99.89% of the votes cast by Shareholders at the special meeting of shareholders.

Investment

Lignol Energy Corporation (TSXV: LEC)  announced that it has agreed to acquire an additional 2.67 million shares of Territory Biofuels Limited (“TBF”) for A$1 million under a TBF private placement offering transaction, which also provides for the further issuance of approximately 0.25 million shares of TBF to other shareholders of TBF. Upon completion, LEC will become the majority shareholder with approximately 56% of the issued shares of TBF and 60% on a fully diluted basis.

Angiotech Pharmaceuticals, Inc. (TSX:ANP)  announced a return of capital will be provided to all holders of record, as at May 31, 2013, of its common shares, and to employees holding restricted share units, in the amount of $6 in cash per common share, or per restricted share unit. The amount to be distributed reflects a substantial portion of the remaining net proceeds received to date per Angiotech’s recently completed sale of its Interventional Products business to Argon Medical Devices, Inc., after the redemption of $60,024,000 in aggregate principal amount of Angiotech’s Senior Secured Floating Rate Notes due 2013, the redemption of $229,413,000 in aggregate principal amount of Angiotech’s 9% Senior Notes Due 2016, and the payment of certain transaction fees and expenses.

Commercial & Other Agreements

RepliCel Life Sciences Inc. (OTC: REPCF) and Shiseido Company, Limited (TYO:4911) announced that they have entered into a Collaboration and Technology Development Transfer Framework Agreement for an exclusive geographic license for RepliCel’s RCH-01 hair regeneration technology. Under the final agreement, Shiseido will pay RepliCel an upfront fee of ¥400,000,000. In addition, Shiseido will pay RepliCel sales milestones up to ¥3,000,000,000. Replicel is also entitled to royalties on sales.

Alethia Biotherapeutics Inc., has entered into a global strategic alliance with the International Biotechnology Center (IBC) Generium to jointly develop AB-16B5, a mAB inhibitor of epithelial-to-mesenchymal transition (EMT). Under the terms of the alliance, Alethia and IBC Generium will collaborate for the ongoing development of AB-16B5 and, upon completion of the initial clinical study, share equally in the downstream economics in territories outside Russia and the CIS states. Alethia will receive an upfront cash payment and R&D funding to conduct the initial clinical study in Canada. In addition to an exclusive license granted to IBC Generium for other territories, IBC Generium has also been granted the right to an exclusive license for Russia and the CIS states for which development milestones and royalties would be payable to Alethia. Further financial terms were not disclosed.

Sirona Biochem Corp (TSXV:SBM)(OTCQX:SRBCF)(FRANKFURT:ZSB)  has signed a Letter of Intent (LOI) to create a collaboration with Cincinnati Children’s Hospital Medical Center. The goal of the collaboration is to create a novel skin care technology by combining Sirona Biochem’s patented cell preservation glycoprotemim with Cincinnati Children’s patented synthetic vernix technology.

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