Amneal is set to acquire a 98% interest in Kashiv Specialty Pharmaceuticals, a wholly owned subsidiary of Kashiv focused on the development of complex generics, innovative drug delivery platforms and novel 505(b)(2) drugs.
Under the terms of the transaction, Amneal will pay an upfront purchase price comprised of a cash payment of $70 million at the closing of the acquisition, which is subject to certain customary purchase price adjustments, and a cash payment of $30 million at the one-year anniversary of the execution of the purchase agreement.
Kashiv also is eligible to receive up to an additional $8 million in contingent payments upon the achievement of certain regulatory milestones. In addition to the foregoing contingent payments, the company has agreed to pay Kashiv certain royalty payments equal to an escalating percentage (from high single-digits to mid-double-digits, depending on the net sales amount) of aggregate annual net sales for certain pharmaceutical products.
“The acquisition of Kashiv Specialty aligns strongly with our Amneal 2.0 growth strategy which we expect will deliver substantial value for our specialty and generics businesses,” said Chirag Patel, co-CEO. “With this acquisition, Amneal will gain an exciting pipeline of valuable 505(b)2 branded products primarily in neurology and endocrinology, where we have a well-established commercial infrastructure, as well as a valuable pipeline of complex generics. Additionally, the transaction enhances our R&D expertise with the addition of the Kashiv Specialty team and its impressive track record in developing complex generic products (e.g. Yuvafem and EluRyng) and innovative drug delivery technologies.”
“Kashiv Specialty’s platform of modified-release delivery technologies and pipeline of specialty programs are extraordinary,” said Chintu Patel, co-CEO “As you know, the focus of Amneal’s specialty strategy has been to leverage known molecules with novel delivery mechanisms to improve efficacy and reduce side effects for patients. This transaction will double our pipeline of branded neurology and endocrinology programs and position us to launch at least one specialty product per year beginning in 2023. It will also provide us with a robust technology platform and in-house engine for driving organic specialty growth for years to come.
“At the same time, we expect the transaction will be financially accretive by approximately $15 million of adjusted EBITDA on an annualized basis due to termination of the current royalty arrangement and reallocation of our historical level of R&D investment,” said Chintu Patel. “We are excited about the momentum we are building in support of our Amneal 2.0 growth vision. Over the coming weeks, we look forward to beginning pre-integration planning and securing the necessary regulatory approvals to complete this transaction.”
“Our management and scientists are excited to be a part of Amneal Pharmaceuticals,” said Navnit Shah, president and chief scientific officer of Kashiv Specialty. “Kashiv Specialty has helped Amneal develop many high-value, complex generic products, and possesses tremendous know-how and patented novel technologies for developing complex generic and specialty products. Going forward, Amneal will provide valuable strategic, operational, and infrastructure support for the rapid development and commercialization of our specialty portfolio, which consists of differentiated 505(b)2 products that will serve patient needs in neurology and endocrinology and provide significant organic growth for Amneal.”