ID Biomedical Corporation and Shire Pharmaceuticals Group plc announced that they have signed an Asset Purchase Agreement related to the sale of Shire's vaccine business to ID Biomedical. Closing of the transaction, which is conditional on approval of the Canadian government under certain government contracts, regulatory approvals and usual conditions of closing, is anticipated by no later than June 30, 2004.
Under the terms of the agreement, upon closing, ID Biomedical will acquire all of Shire's vaccine assets for a cash payment of US $60 million (payable $30 million on closing and $30 million on the first anniversary of closing) and subscription receipts allowing Shire to acquire approximately 5.4 million common shares of ID Biomedical representing additional consideration of US $60 million. The subscription receipts will have an exercise period of 18 months commencing 120 days after closing. Each of ID Biomedical and Shire will have the rights in certain circumstances to require the repurchase of the subscription receipts for cash. Those circumstances are under the direct control of ID Biomedical.
As part of the agreement, Shire will provide ID Biomedical with a loan facility of US $100 million to be used over a four year period to finance the continued development of the vaccine business that ID Biomedical is acquiring. This facility is repayable out of income from the non-Canadian sales of Fluviral, and pipeline vaccine product sales that are developed utilizing the funding facility. There are certain caps on the repayment obligations based on the amount drawn and the directed use of the funds.
"The number one priority of ID Biomedical was to acquire an antigen supply for our intranasal FluINsure vaccine and through this acquisition we achieve this critical goal. ID Biomedical is now positioned to become a leading flu vaccine company with the potential to capture significant market share by providing products to both the traditional intramuscular, as well as the premium priced intranasal markets," said Anthony Holler, ID Biomedical's chief executive officer. "Additionally, through the acquisition we will have one of the most attractive pipeline portfolios in the industry. ID Biomedical is positioned to become a major player in the vaccine industry."
Shire's vaccine business generated sales of approximately C$36 million in 2003. These revenues largely came from sales of Fluviral, a subunit, nonliving, intramuscular flu vaccine sold by Shire to the Canadian government. Currently, Shire is the 5th largest flu vaccine manufacturer in the world. In 200l, Shire's vaccine subsidiary entered into a contract worth up to C$300 million with the Canadian Government to supply public flu vaccine over the next several years, as well as guaranteeing to supply the entire population of Canada in the event of a flu pandemic. Upon a successful closing of the transaction, ID Biomedical expects to sell approximately 7 million doses of Fluviral to the Canadian government in 2004. Shire's vaccine unit also has a C$80 million agreement with Technology Partnerships Canada to develop a pipeline portfolio of protein-based or subunit vaccines.