SciClone Pharmaceuticals has acquired NovaMed Pharmaceuticals
a China-based specialty pharmaceutical company. The acquisition brings
additional broad sales and marketing, as well as regulatory and extensive
business capabilities and pharmaceutical assets in the regulatory approval stage
to its growing and profitable China-focused specialty pharmaceutical business.
SciClone believes this acquisition will further position it as a leader in the
rapidly expanding pharmaceutical industry in China.
Under terms of the agreement, NovaMed shareholders are
entitled to receive up-front payments of approximately $24.7 million in cash,
8,298,110 shares of SciClone common stock valued at approximately $37.1 million
(based upon the closing price of $4.47 on the NASDAQ stock market on April 18,
2011) and the right to additional cash consideration of up to $43.0 million,
contingent upon the successful achievement of revenue and earnings targets for
the 2011 and 2012 fiscal years.
The Company anticipates that NovaMed and SciClone’s combined
revenue for fiscal 2011 on a pro forma basis will be between $140 and $145
million. SciClone’s GAAP revenue for fiscal 2011 will exclude NovaMed’s revenue
prior to the closing of the acquisition. SciClone is updating its guidance to
reflect the acquisition and anticipates that its 2011 GAAP revenue will be
between $133 and $138 million, and cash, cash equivalents and investments at
December 31, 2011 to be greater than $45 million. The Company anticipates
updating earnings per share guidance with its first quarter 2011 earnings
announcement expected in early May 2011.
NovaMed, a privately-held, China-based pharmaceutical
company backed by foreign venture capital, has a portfolio of 18 drug products
spanning four major therapeutic areas including oncology, cardiovascular disease,
central nervous system (CNS) disorders and urology/infection. To support this
broad product portfolio, NovaMed has built a sales organization of more than
450 individuals with extensive pharmaceutical industry experience in
penetrating the rapidly expanding pharmaceutical market in China. Growing
revenues more than 25% annually since inception, NovaMed generated revenues
totaling $31.5 million (unaudited) in 2010.
SciClone’s acquisition of NovaMed was completed on April 18,
2011 through a share purchase agreement, which contains additional terms. The
terms of the acquisition are described in a form 8-K filed by the Company on
April 19, 2011.
“NovaMed represents an excellent strategic acquisition
as it allows SciClone, in a single transaction, to dramatically expand our
presence in China in five important areas: pharmaceutical products, targeted
therapeutic indications, management depth, sales force size and revenue,”
stated Friedhelm Blobel, Ph.D., President and Chief Executive Officer of
SciClone. “Whereas SciClone had already established itself in China with
our successful ZADAXIN@ franchise, we have now evolved into a formidable
presence in this fast growing market with a combined sales force of more than
680 individuals, nearly 20 commercial stage products spanning several key
indications, and an expanded Shanghai based management team with significant pharmaceutical
industry experience.”
Jon Saxe, Chairman of the Board of SciClone, added:
“The combined entity should be an even more attractive partner for pharmaceutical
companies wishing their products to be developed and represented in the Chinese
market.”
Among NovaMed’s most successful, exclusively promoted
commercial-stage products are Depakine@, the most widely prescribed
broad-spectrum anti-convulsant in China, Tritace@, an ACE inhibitor for the
treatment of hypertension, and Stilnox@, a fast-acting hypnotic for the
short-term treatment of insomnia (marketed as Ambien@ in the US), as well as
Aggrastat@, a recently-launched intervention cardiology product. NovaMed’s
pipeline also includes pharmaceutical assets in the regulatory approval process
from partners such as Bio Alliance, Orexo, Meda, and EUSA. In building this
broad pharmaceutical portfolio, NovaMed has established exclusive licensing and
promotion agreements with a number of the world’s leading pharmaceutical
companies, including Sanofi-aventis, Pfizer Inc., and Baxter International Inc.
“The opportunity to join forces with SciClone further
advances the work that NovaMed has undertaken to build itself into a leading
specialty pharmaceutical company in China,” said Bo Shao,
Co-founder of NovaMed. Mark Lotter, Co-founder and Chief Executive Officer of
NovaMed added: “By combining the important financial resources and strong
sales and marketing capabilities offered by SciClone with NovaMed’s proven
experience in in-licensing and marketing novel therapeutics for the China
market, we are in a strong position to participate in and benefit from the
rapidly expanding pharmaceutical market in China.”
Following the close of the acquisition, SciClone’s current
operations in China and the
newly acquired NovaMed will continue to operate as separate entities in the China market
but under the leadership of Mr. Lotter. The NovaMed unit will continue to lead
sales and marketing efforts for its current product portfolio. SciClone’s sales
and marketing team will continue to sell and market ZADAXIN.
As part of the transaction, Mr. Lotter and Peter Barrett
have been appointed to SciClone’s board of directors. Mr. Barrett served as a
director of NovaMed and is a partner of Atlas Venture, one of NovaMed’s
principal investors. Mr. Lotter has also been appointed as an officer of the
Company and will oversee the China-based operations for SciClone as CEO of the
China Business.
