Medivir to acquire BioPhausia for about $90 million

Swedish pharmaceutical company Medivir has announced their intention to acquire BioPhausia, another Swedish firm, for about $90 million.

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Swedish pharmaceutical company Medivir has announced theirintention to acquire BioPhausia, another Swedish firm, for about $90 million.Medivir has offered a combination of cash and new shares that value BioPhausiaat approximately 565 million Swedish kroner (EUR62 million, US$90 million), orabout 1.65 crowns per share, which represents a 44 percent premium overBioPhausia's average share price over the past 30 days. BioPhausia's board ofdirectors recommended the offer unanimously.
Ron Long, CEO of Medivir, says the company is delighted towelcome the BioPhausia team, adding that the skills they bring with them willhelp to advance commercial capabilities for realizing value from TMC435, aonce-daily protease inhibitor currently in Phase III development for those withhepatitis C.
The acquisition of BioPhausia provides Medivir with apresence not only in Sweden, but also in Copenhagen, Denmark; Warszawa, Poland;and Helsinki, Finland, all of which boast local offices of BioPhausia. Medivirgets complementary competencies in distribution, marketing, logistics,regulatory affairs, sales and quality assurance, as well. BioPhausia'spharmaceutical portfolio covers diseases such as emergency medicine, centralnervous system and gastrointestinal, including products such as Mollipect andCitodon.
BioPhausia gives Medivir complementary competencies inregulatory affairs, logistics, distribution, marketing, sales and qualityassurance, and a local presence in Sweden, Denmark and Finland. It expandsMedivir's presence and commercial capabilities in the Nordic region, in keepingwith their vision and mission of growing into "a profitable, medium-sizedpharmaceutical company in high growth with its prime strength in infectiousdiseases within a five-year period," as stated on the company website.
Medivir also includes the intent "to invent, develop andmarket pharmaceuticals that effectively and selectively inhibit protease andpolymerase enzymes as drug targets" in their company mission, which is whatmakes the BioPhausia acquisition a strong one for the company.
BioPhausia develops therapeutics in such areas as women'shealth, cardiovascular, musculoskeletal and inflammation, and describes theirbusiness as being divided into three areas: "own, licensed andparallel-imported products."
In a statement posted on the company website by BioPhausia'sBoard of Directors regarding the offer, the Board unanimously recommended thatshareholders accept the offer. The statement asserts that the Board feels that"a merger of BioPhausia and Medivir is an industrially sound transaction,"adding that "BioPhausia brings a commercial platform to Medivir's researchportfolio and its commercial rights in the Nordics" and that "the businesses ofboth companies complement each other well." The Board does go on to caution,however, that "there are risks associated with Medivir's business" as most ofMedivir's products (including TMC 435) are in a development phase and there istherefore a customary uncertainty regarding the future earnings."

The Board also adds that they have "noted that Medivir hasstated that it anticipates limited effects as a result of completion of theOffer and Medivir's strategic plans for the employees of BioPhausia and theirterms of employment as well as the Company's operations at locations whereBioPhausia conducts business." 
The offer, according to the statement, is "inter aliacondition upon that Medivir becomes the owner of more than 90 percent of theshares in BioPhausia, that no other party announces an offer with morefavorable conditions than the Offer and that the shareholders in Medivirresolve on the necessary decisions to issue new shares in Medivir." Skandia Livand Originat AB, two of BioPhausia's largest shareholders, have expressedintent to accept Medivir's offer. Subject to being declared unconditional orbeaten by a better offer, "settlement is expected to commence on or around June7, 2011."
BioPhausia has brought on SEB Enskilda as financial advisorfor the offer, and White & Case as legal advisor.

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