Biotech Values

[DewDiligence]

EGRX enters FoB arena by acquiring high-profile start-up for $30M up-front and $48M in contingent payments:

http://finance.yahoo.com/news/eagle-pharmaceuticals-signs-definitive-agreement-120000978.html

Eagle Pharmaceuticals today announced that it has signed a definitive agreement to acquire Arsia Therapeutics (“Arsia”), an early-stage biotechnology firm with proprietary viscosity-reducing technology and formulation know-how.

The acquisition will mark Eagle’s entry into biologics, the fastest growing sector of the pharmaceuticals market, and will allow the Company to apply its proven market strategy to offer “biobetter” formulations, and to aid in the rapid development of novel biologics.

…Under the terms of the stock purchase agreement, Eagle will pay approximately $30 million at closing, $27.3 million of which will be paid in cash and $2.7 million of which will be paid in Eagle common stock. Eagle has also agreed to pay up to $48 million in additional payments upon the completion of certain milestones…

Arsia founders and renowned MIT professors, Dr. Robert Langer and Dr. Alexander Klibanov, as well as other key members of the Arsia team, have simultaneously entered into agreements that are effective upon the closing of the acquisition to work with Eagle to develop new formulations and solve delivery challenges in the large molecules space.

I wasn’t expecting this move. EGRX seemed to be satisfied being a 505b2 company—i.e. reformulating small-molecule drugs (such as Treanda—>Bendeka) to increase their value in the marketplace.