Hospira to acquire Javelin Pharmaceuticals for $145 million

Hospira, Inc., a specialty pharmaceutical company has yesterday agreed to acquire Javelin Pharmaceuticals, a development stage drug company for $145 million in cash to expand its pain management portfolio.
 
Lake Forest, Illinois-based Hospira will pay Javelin $2.20 per share in cash, or approximately $145 million
 
Hospira also entered into a loan facility agreement with Javelin, where Cambridge, Massachusetts-based Javelin can borrow up to $4.5 million to fund its operating activities prior to closing a merger with Hospira.
 
Javelin will repay $8.3 million for a similar financing arrangement entered into with Myriad Pharmaceuticals and $4.4 million towards termination fee for terminating its merger agreement with Myriad.
 
Javelin applies innovative proprietary technologies to develop new drugs and improved formulations of existing drugs to target medical needs in the pain management market.
 
The company has one marketed drug in the UK, an NDA-submitted drug, Dyloject, and two drugs in advanced clinical development in the US. In 2009, Javelin had revenues of $3.8 million.
 
Lake Forest, Illinois-based Hospira, Inc.with 2009 revenues of $3.9 billion, is a specialty pharmaceutical and medication delivery company specialising in generic injectable pharmaceuticals.
 
Hospira has one of the broadest portfolios of generic acute-care and oncology injectables, as well as integrated infusion therapy and medication management solutions.

The acquisition of Javelin would allow Hospira to take advantage of synergies between Javelin's potential drug, Dyloject, a post-operative pain management drug currently awaiting US Food and Drug Administration (FDA) approval, and Hospira's proprietary sedation agent, Precedex.

"Dyloject would broaden Hospira's pain management portfolio and offers attractive revenue and margin prospects," said Ron Squarer, chief commercial officer, Hospira. "Dyloject is also a very good fit with Precedex, and further demonstrates Hospira's strong commitment to the acute-care space."

Dyloject is a proprietary non-opioid analgesic that will help reduce the need for traditional intravenous opioids. Opioids are central to the management of post-operative pain, but are associated with significant adverse events, including respiratory depression, sedation, nausea and vomiting, slowing of the gastrointestinal function and urinary retention.

Hospira would have global rights to Dyloject with the exception of Europe, where rights are currently licensed to a third party. Hospira plans to market the product in the US, Canada, Latin America and the Asia-Pacific region.