Recipharm Acquires Flamel Technologies
Recipharm AB (Jordbro) and Flamel Technologies SA (Lyon) have announced that they have entered into a long term collaboration and signed an agreement whereby Recipharm will purchase Flamel’s development and manufacturing facility located in Pessac, France. Recipharm will significantly expand its pharmaceutical development capacity and technical capabilities to provide easier access for development services to its French and other customers.
Recipharm will also provide development and manufacturing support to Flamel under a long term services agreement. This new partnership allows Flamel to retain access to the development and manufacturing capabilities of Pessac and gain the possibility to use any of Recipharm’s other facilities for the development or manufacture of their proprietary pipeline. Recipharm will also assume development and manufacturing agreements with other companies and as well as an agreement providing a royalty income.
• The purchase price for the assets is €10.6m plus working capital.
• In a separate transaction, Recipharm will also make an investment of €10.5m in newly issued Flamel Shares which corresponds to approximately 2.3% of Flamel shares.
• Recipharm and Flamel have entered into a long term service agreement.
• Recipharm will assume several new development and manufacturing contracts and relationships.
• Recipharm will assume a contract from Flamel which will generate an ongoing royalty income.
• Recipharm and Flamel have agreed to negotiate a contract with the intention of further enhancing the economic benefits to both companies whereby Recipharm will incorporate Flamel’s drug delivery technologies into its contract development business.
• Recipharm has an option to negotiate with Flamel for the European rights to any product that Flamel plans to license for sale in the European market.
• Recipharm’s European development reach and capabilities will be enhanced by the transaction providing easier access especially for French customers.
• The deal adds new technical capabilities for spray granulation and spray coating.
• Accretive to profit and EPS.
• Closing is expected before the end of 2014.
Speaking about the transaction, Thomas Eldered, CEO of Recipharm said “I am delighted that we are now entering into a strategic partnership with Flamel and taking over a first class development and manufacturing facility in France. Development services is in many respects a ‘local’ business so having another centre in addition to Sweden should allow us to increase this aspect of our business. Our investment into Flamel is also particularly exciting given the clear strategy that they are pursuing. The commitment we are both showing towards each other is a clear demonstration of the bright future we see for this relationship. We are looking forward to supporting Flamel to fulfill their ambitions to develop and manufacture new products based on their proprietary technology”.
Mike Anderson, CEO of Flamel added “Flamel’s primary objective is the development of products using the company’s proprietary drug delivery platforms. The sale of the Pessac facility frees us from the time-consuming task of running a contract development manufacturing facility.”
He added “This sale allows us to continue development of our proprietary products using our current drug delivery technologies at the Pessac facility and the option to utilize Recipharm’s commercial manufacturing capabilities elsewhere. Given Recipharm’s expertise, the investment in Flamel’s stock is a welcome endorsement of Flamel’s anticipated success moving forward.”