Emergent Biosolutions Inc (NYSE:EBS) is reportedly planning to purchase the Small vaccine called ACAM2000 from Sanofi SA (ADR) (NYSE:SNY) and the deal is reportedly worth $125 million.
Emergent claims that the deal is advantageous because it will strengthen its strategic focus in dealing with public health threats. The company considers ACAM2000 a vital addition to its portfolio especially because it is the only small pox vaccine that is licensed by the FDA for immunization in patients that are at a high risk of contracting the disease. The acquisition is part of the company’s strategy to strengthen its portfolio for countering Category A bioterrorism agents.
The purchase of ACAM2000 will also complement Emergent’s Vaccinia Immune Globulin Intravenous (VIGIV), a smallpox countermeasure from the company that is the only FDA-approved treatment for certain complications arising from smallpox vaccination. It was introduced in 2005 and counters complications from ACAM2000.
Details of the deal
Reports claim that Emergent will part with $97 million upfront to be paid to Sanofi as part of the deal while the remaining $27.5 million will be included as manufacturing milestone and near-term regulatory payments. Emergent CEO Dan Abdun-Nabi stated that he expects the acquisition to offer a significant contribution to his firm’s revenue growth in 2018. He also added that the deal will be critical for the company towards achieving the goal of 10 percent revenue from sales in the international market.
“This transaction diversifies our portfolio and broadens our countermeasure franchise with a vaccine that is being stockpiled both in the U.S. and internationally,” stated Abdun-Nabi.
Abdun-Nabi also believes that the acquisition will help bring the firm closer to a total revenue of $1 billion by 2020. The acquisition deal also includes a manufacturing agreement for Sanofi to manufacture the product at its Canton site. Sanofi will also provide the necessary materials. The deal is expected to go through an antitrust regulatory approval before coming to a close before the end of the year.
Emergent Biosolutions stock closed the latest trading session on Friday at $34.50 after a 0.26 percent gain from the value of the stock at the previous close.