Galenica to Buy Relypsa for $1.53 Billion to Beef Up in U.S
Galenica AG, the owner of Switzerland’s biggest pharmacy network, agreed to buy Relypsa Inc. for about $1.53 billion to gain a new medicine and a commercial network in the U.S.
The Swiss company will pay $32 per share in cash for Redwood City, California-based Relypsa, it said in a statement Thursday. That’s 59 percent above Relypsa’s closing price Wednesday of $20.10. Galenica fell 9.5 percent to 1,236 Swiss francs in Zurich. Relypsa jumped 58 percent to $31.84 at 10:47 a.m. in New York.The transaction gives Galenica’s business unit Vifor Pharma a U.S. commercial network and global rights to Relypsa’s drug Veltassa, which was the first new medicine in 50 years to be approved in the U.S. for hyperkalemia, a condition in which there is too much potassium in the blood. After the combination, which both boards approved, Galenica still plans to split into two separately listed companies next year. The acquisition is expected to close during the third quarter of 2016.“The acquisition is about growth, it’s not about synergies,” Galenica Chief Financial Officer Joerg Kneubuehler said on a conference call Thursday. The addition of Relypsa should add to earnings starting in 2019, he said.Galenica’s strategy is to grow via licensing deals and acquisitions, the company said in the statement, and Vifor intends to specialize in cardio-renal and gastroenterology drugs. The unit already sells Roche Holding AG’s iron-deficiency drug Mircera in the U.S. It also agreed to sell a renal medicine called Retacrit for Pfizer Inc. in May.“Relypsa is an excellent strategic fit for Vifor Pharma and an important step forward building a leading specialty pharmaceutical company,” Gianni Zampieri, Vifor’s interim chief executive officer, said on a conference call. He said the portfolio has the “potential of blockbuster opportunities.”With Veltassa, Galenica will likely face competition from AstraZeneca Plc’s ZS-9, which is awaiting FDA approval. Hyperkalemia affects about 3 million people in the U.S. with late-stage chronic kidney disease or heart failure, according to the statement, which said Veltassa could be a blockbuster.Credit Suisse Group AG acted as the sole financial adviser to Galenica and will supply bridge loan financing for the transaction, the company said. Centerview Partners and BofA Merrill Lynch acted as financial advisers to Relypsa.“We are not putting all our eggs in one basket,” Galencia Chairman Etienne Jornod said on the call. “This is just one step and we intend to continue to acquire.”July 21, 2016
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