£108m German acquisition gives drugs firm Vectura new firepower to treat lung disease

March 13, 2014

Chippenham-based drug development firm Vectura today strengthened its position in the respiratory diseases treatment market with the €130m (£108m) acquisition of specialist German pharmaceutical company Activaero.

Privately-owned Activaero’s proprietary smart nebuliser-based technology targets drugs at particular areas of the lung. It is currently part in seven clinical and several pre-clinical stage programmes.

Vectura, which focuses on developing drugs to treat airways-related diseases, said the Activaero acquisition fulfiled a number of strategic priorities in a single transaction, creating a therapeutic area specialist for airways diseases.

The growing global market for treatment of these conditions, which include asthma and chronic obstructive pulmonary disease (COPD), is estimated to be more than $46bn.

Taking over Activaero would diversify Vectura’s income streams, give access to revenue-generating, proprietary, smart nebuliser-based technology and bring opportunities to develop a wide range of molecular entities, ranging from small molecules to biologics, the firm said.

Vectura also said the deal would accelerate revenue growth, bring a double-digit return on investment and lead to savings of around €1.5m by reducing duplicate head office and administrative costs.

The acquisition is being funded through a mix of existing cash and equity including £79m payable at completion, comprising £38m in cash and £42m in new Vectura ordinary shares.  

A further £29m in cash is deferred to August 1 next year and there could be a further £5m for Activaero shareholders for future transactions involving Activaero's technology.

Activaero, which employs around 50 staff at its HQ in central Germany, recorded revenues last year of around €10.2m.

Vectura chief executive Dr Chris Blackwell said: “We are determined to build further value in our company and this transaction represents an important step towards building a sustainable specialty pharma business.

“The acquisition is highly complementary to Vectura’s core capabilities, in-line with our strategic priorities and, I believe, will enable us to build a therapeutic specialist in airways diseases.

“With this transaction, we create a much stronger entity with a balanced offering of products and technologies, both partnered and un-partnered. Our considerably deeper pipeline and new partnerships will provide us with the opportunity to drive organic growth.

“We see significant value in the combination of our respective respiratory expertise and believe that the combined company is well positioned to extract even more value from our broader technology base and potentially retain greater economics from pipeline assets.”

Activaero founder and chief executive officer Dr Gerhard Scheuch added: “Vectura is well positioned to develop Activaero’s assets using its development expertise and building on its success in deriving value from its products.

“Our corporate partners and patients will greatly benefit from the new joint organisation. It will allow us to even better serve our clients by offering a broader spectrum of innovative therapeutic options and services going forward.”

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