Axcan Pharma Inc has signed an agreement to acquire a pancreatic enzyme line of products from Abbott Laboratories for a cash purchase price of US $45 million. Axcan will acquire various marketing authorization and intellectual property rights, including patents and trademarks to the Panzytrat product line. Axcan expects this acquisition to be immediately accretive, generating approximately 8 cents per share in additional earnings over the next 12 months.
The purchase price that has been set at US $45 million will be paid using Axcan's cash on hand. It represents a multiple of 2.7 times net sales of $16.7 million recorded by Abbott during the past 12 months.
Panzytrat products consist of enteric-coated microtablets for the treatment of exocrine pancreatic deficiency and are marketed in several countries. The greater portion of Panzytrat sales is reported in Germany, the third largest pharmaceutical market worldwide, as well in the Netherlands.
"Panzytrat is a perfect fit for Axcan and this acquisition is a major strategic move. We expect that sales of Axcan's three pancrelipase brands (Ultrase, Viokase, and Panzytrat) will exceed $50 million, making Axcan the second leading marketer of these preparations worldwide," said Léon F. Gosselin, Axcan's President and CEO. "Moreover, Germany is a strategic market for us since we intend to launch Photobarr there, as well as in other markets, for the treatment of high-grade dysplasia associated with Barrett's Esophagus in fiscal 2004. This acquisition builds upon the earlier acquisition of Lactéol and Entéris in France earlier this year and establishes Axcan as a significant player in the European gastrointestinal market," he concluded.
Abbott and Axcan will work closely together to ensure a smooth transition. During an interim period to accommodate the transfer of marketing authorizations, Axcan will record revenue net of costs of goods sold equal to approximately 60 percent of the end-market sales, with Abbott recording the remainder in line with its interim distribution responsibilities. Axcan will report all net sales and related expenses as the respective marketing authorizations are transferred. The transition period is expected to last approximately six months.