Jazz could pay €530m for US pharma

DUBLIN-BASED Jazz Pharmaceuticals has agreed to pay up to $700 million (€530 million) in cash for a speciality drug business in the US that has recently been granted approval for a new drug targeting childhood leukaemia.

Jazz, which is listed on the New York Nasdaq exchange, will pay $650 million up front for Eusa, a privately held company that specialises in cancer therapies.

The company, which moved its base to Dublin as part of its $500 million all-share acquisition of Azur Pharma earlier this year, will pay an additional $50 million if Eusa’s lead product, Erwinaze, hits certain sales targets in 2013.

Erwinaze was approved last September by the US Food and Drug Administration for the treatment of acute lymphoblastic leukaemia, the most common cancer in children. Apart from Erwinaze, Eusa has a portfolio of niche cancer therapies. The company, founded in 2006, has 180 employees and delivered net sales of $46 million in the first quarter.

Jazz said the acquisition was expected to be “earnings accretive” from the outset.

Although the move into cancer treatments is a departure for Jazz, sources close to the firm said Eusa’s model was similar to Jazz’s existing operations – it specialises in niche products (Erwinaze has “orphan” status as a drug addressing a rare medical condition with few alternative therapies), and has a distribution system geared to interacting closely with a small cohort of medical practitioners.

“Eusa Pharma is a compelling strategic fit . . . and furthers our mission to improve patients’ lives by delivering therapies that address serious unmet medical needs,” said Jazz chairman and chief executive Bruce Cozadd.

Jazz had made clear its intention to pursue other acquisition opportunities after the Azur deal and has strong cash on its balance sheet. The transaction, which has been approved by the boards of both companies, is expected to close at the end of June. The Dublin company’s shares jumped 17 per cent to $52.91 by lunchtime yesterday in New York.