Sanofi sells dermatology unit to Valeant Pharmaceuticals for $425 million
Continuing its growth-through- acquisition strategy, Valeant gets ready to expand its already burgeoning dermatology presence by buying Dermik Laboratories Inc. from Sanofi
That payout of several hundred million will net Valeant allDermik assets, including available inventories of about $18 million. Thisincludes aesthetic and therapeutic markets in both United States and Canada, aswell as aesthetics-only business in dispersed locales around the globe.Valeant's acquisition of Dermik would also mean worldwide rights (except inFrance) to Sculptra Aesthetic (injectable poly-L-lactic acid), and Valeantnotes that Dermik has "a significant presence in the medical dermatology marketin the United States and Canada with a strong field force and well-knownbrands."
In addition to the Sculptra brand, a facial injectable forthe correction of facial wrinkles and folds, Dermik's portfolio includes suchtherapeutic and aesthetic dermatology brands as Benzaclin for the treatment ofacne and Carac for the treatment of keratoses.
Also included in the deal would be Sanofi's site in Laval,Canada, which includes Dermik's manufacturing facility. Overall, the facilityproduces some 70 formulations and more than 200 presentations of tablets,capsules, non-sterile liquids, ointments and creams right now. Themanufacturing is performed not just for Sanofi products but also various thirdparties.
Dermatology isn't some sudden new interest for Valeant.Going back to at least 2008, J. Michael Pearson, chairman and CEO of thecompany, has been open about his desire to capture a significant share of thegrowing global dermatology market. In September 2008, Valeant spent $95 millionto buy dermatologic firm Coria Laboratories and $12.2 million for Australia's DermaTech, which makesover-the-counter and prescription drugs for acne, psoriasis, warts, head liceand nits around the same time. That was followed in December 2008 by the $285million acquisition of California-based research dermatology specialist DowPharmaceutical Sciences.
With the $3.2 billion merger deal with Biovail in September2010, dermatology became one of three key therapeutic areas at Valeant, theothers being neurology and ophthalmology.
"We are pleased to add another strong dermatology franchiseto our growing operations in the U.S. and Canada," Pearson says. "Dermik'sassets, both in the medical and aesthetic therapeutic areas, provide us withexciting opportunities to leverage our combined portfolios in our currentmarkets as well as options to expand Valeant's presence to other territories.Furthermore, the manufacturing facility will provide increased capacity for ourfuture growth initiatives in the U.S. and Canada."
For its part, Sanofi says that offloading the business willallow it to better continue concentrating efforts on its growth platforms, andSanofi's CEO, Christopher Viehbacher, notes: "Our manufacturing operations in Laval and our field operationsteams will benefit from Valeant's stronger presence in dermatology."
Total 2010 Dermik revenues, including contract manufacturingincome, were approximately $240 million and, pending various closingadjustments and regulatory approvals, including the termination or expirationof Hart-Scott-Rodino waiting period, Valeant expects the acquisition to beaccretive in 2011.
