Chiron Corporation, a global pharmaceutical company, announced that it had launched a recommended cash tender offer for all outstanding shares of common stock of UK-based vaccines company PowderJect Pharmaceuticals plc.
Chiron has offered PowderJect 550 pence per share, or approximately $878 million, for all such shares. The tender offer is subject to valid acceptances being received in respect of not less than 90 per cent in nominal value of the PowderJect shares, and to customary regulatory filings and other customary conditions. The boards of directors of Chiron and PowderJect have unanimously approved the transaction.
“We consider PowderJect to be an excellent strategic fit for Chiron,” said Howard Pien, chief executive officer and president of Chiron. “This deal will help us to achieve our goal of expanding our global vaccines business quickly in the United States while building on our platform for new products. In addition to allowing us to enter the U.S. business for vaccinations for flu, the combination with PowderJect will expand our manufacturing capabilities. We look forward to working with the people of PowderJect to create a stronger global player in the vaccines business. Chiron is committed to increasing its impact on human health worldwide through all three of its business units: biopharmaceuticals, vaccines and blood testing.”
UBS Warburg is acting as Chiron's financial advisor. Credit Suisse First Boston is acting as PowderJect's financial advisor.
The combination of Chiron and PowderJect will build on the two companies' existing positions as the fifth and sixth largest vaccines businesses in the world, respectively, and will represent a major advance in the vaccines business strategy of both companies. Chiron and PowderJect had combined total annual revenue of over $1.5 billion for the year to March 31, 2003.
The combined companies will be the world's second-largest provider of flu vaccines. PowderJect's product, Fluvirin, is a leading flu vaccine in the United Kingdom and is one of only two available injectable flu vaccines in the United States. PowderJect's strong position in the United States is complemented by Chiron's prominent position in Europe. With its three brands--Agrippal S1, Begrivac and Fluad--Chiron is currently the second-largest producer of flu vaccines outside of the United States. As governmental and supranational programs and policy increase public awareness of flu and advocate increased immunization, the combined companies' flu vaccines sales should continue to grow.
The combination of Chiron and PowderJect is also expected to enhance the combined companies' position as a leading player in both the United States and European vaccines businesses. Furthermore, it will provide a stronger platform for new products, including Chiron's flu cell culture vaccines, meningococcal vaccines and novel vaccines for viral infections currently in development, to be introduced in the United States.
The combination of Chiron and PowderJect will provide increased manufacturing capability. PowderJect's FDA-approved manufacturing facility at Liverpool in the United Kingdom is one of the largest flu vaccines manufacturing facilities in Europe. This, together with PowderJect's facility in Sweden, will complement Chiron's existing manufacturing operations.
As well as an enhanced flu franchise, the combination of Chiron and PowderJect will also complement Chiron's wider vaccines portfolio at a time when Chiron's research and development pipeline matures toward the launch of high-value products. Chiron also offers pediatric vaccines, while both Chiron and PowderJect offer a range of travel vaccines.