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AMRI to Acquire Oso Biopharmaceuticals Manufacturing

Published: Tuesday, June 03, 2014
Last Updated: Thursday, June 05, 2014
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Acquisition significantly expands contract manufacturing capabilities to include commercial scale sterile injectables.

AMRI announced that it has signed a definitive agreement to acquire all of the outstanding membership interests of Oso Biopharmaceuticals Manufacturing, LLC  for $110 million in cash. OsoBio is recognized as a premier contract manufacturer of highly complex injectable drug products, including sterile liquid, suspension and lyophilized formulations. The acquisition and associated fees are expected to be financed through cash currently held by AMRI, and, subject to Hart-Scott-Rodino clearance and other conditions to closing, is expected to be completed in the third quarter of 2014.

“The acquisition of OsoBio is highly complementary to our finished dose manufacturing business, and is consistent with our strategy to be the preeminent supplier of custom and complex drug development services and products to the pharmaceutical industry,” said William S. Marth, AMRI’s president and chief executive officer. “OsoBio adds significantly to our sterile manufacturing capabilities, extending our industry-leading position in early stage contract manufacturing to now include OsoBio’s preeminent large-scale commercial production. In addition, we expect to realize savings in capital costs associated with the previously planned facility expansion.”

“We are very excited about the synergies that our Albuquerque operations will bring to AMRI as part of their organization,” said Milton Boyer, OsoBio’s President. “The addition of AMRI’s experience and capabilities in early phase development greatly increases the value proposition for our customers, providing a single source to address all sterile fill/finish needs from phase 1 development complete to commercial supply.”

Located in Albuquerque, New Mexico, OsoBio is a trusted, long-time partner to many of the industry’s leading pharmaceutical companies and is well respected for its expertise in manufacturing complex injectables, its reliability of supply and superior track record of quality. OsoBio’s core capabilities include liquid fill and lyophilized products, highly potent compounds, cytotoxics, proteins and peptides, monoclonal antibodies, vaccines, liposomal suspensions and controlled substances. OsoBio has provided manufacturing support for more than 250 unique products and their attractive development pipeline, which includes multiple late-stage products, is expected to be important contributor for future growth.

On a stand-alone basis, OsoBio’s forecasted full year 2014 revenue is between $58 million and $60 million, with adjusted EBITDA of between $9 million and $10 million, implying a purchase price multiple of 11 times 2014 adjusted EBITDA at the top end of the range. Adjusted EBITDA excludes any deal related costs or purchase accounting impacts.

AMRI anticipates full year run-rate synergies of approximately $3 million of EBITDA within 12 months of closing. Subject to Hart-Scott-Rodino clearance, the Company anticipates the acquisition will be accretive to 2014 earnings and intends to provide investors with updated 2014 guidance for the combined company when it releases its second quarter 2014 financial results.

OsoBio is expected to continue to operate independently within AMRI’s Drug Product business unit. Milton Boyer, the current president and chief executive officer, will lead the OsoBio team and report into Steven Hagen, Ph.D., AMRI’s senior vice president of manufacturing and pharmaceuticals.

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