Alliance Pharma agrees to buy Cambridge Laboratories
Alliance Pharma, a UK-based specialist pharmaceutical company, has conditionally agreed to buy Cambridge Laboratories for between
Alliance Pharma, a UK-based specialist pharmaceutical company, has conditionally agreed to buy Cambridge Laboratories for between £14.3m and £16.4m, plus an additional £1.4m for Cambridge Laboratories" inventory.
To fund the acquisition Alliance has conditionally placed 28.8 million new shares, raising £7.5m in cash, and has extended its lending facilities with Lloyds Banking Group.
Cambridge Laboratories" offices in Dublin and Newcastle will transfer to Alliance, together with around 30 staff.
Alliance proposes to merge the support functions into its existing offices in Chippenham, Wiltshire, with the loss of approximately 25 jobs. The transaction should be completed by 22 February.
Included in the purchase are 18 prescription drugs across a range of therapeutic areas, including: ImmuCyst, an immunotherapy for superficial bladder cancer; gelclair, an oral gel for the management of oral mucositis caused by chemotherapy and radiotherapy; procarbazine, a treatment of Hodgkin's Lymphoma as part of chemotherapy treatment; and a liquid formulation of Vitamin E, the only one licensed in the UK.
The portfolio also includes a toxicology product that is purchased by the UK government for a stockpile, which is replaced on a 2-3 year cycle. Cambridge Laboratories has been awarded the contract, worth £5.6m, for the current stockpile replacement, which is taking place between October 2009 and January 2011.
Certain of the products being acquired by Alliance are licensed from third parties and typically due for renewal every five years.
In the year to 31 December 2009 (based on unaudited accounts), Cambridge Laboratories" gross profit was £4.9m on total sales, excluding the toxicology product, of £10.6m.
The cancer treatments accounted for approximately 40% of sales in 2009 and together their sales have been growing at around 18% per annum over the past three years. Alliance will maintain the specialist sales force of five that is currently promoting these products.
