Hikma is set to strengthen its injectables portfolio. The company has agreed to acquire Custopharm from Water Street Healthcare Partners.
Custopharm, a U.S.-based generic sterile injectables company with a differentiated product portfolio and R&D pipeline, currently markets its products in the United States through its commercial arm Leucadia Pharmaceuticals.
Hikma will pay an initial cash consideration of $375 million on a debt and cash-free basis, with a further $50 million in contingent consideration payable upon the achievement of certain commercial milestones.
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Since partnering with Water Street in 2015, Custopharm has received 13 Food and Drug Administration approvals, with four first-to-market ANDA approvals - including one with Competitive Generic Therapy designation - and one novel 505(b)(2) NDA approval.
Based in Carlsbad, California, Custopharm has 39 employees.
Transaction highlights include the following:
- Complements Hikma’s injectable product portfolio and pipeline, adding 13 approved products and additional pipeline products;
- Enhances Hikma’s R&D capabilities, adding an experienced scientific team of dedicated R&D professionals with a proven ability to develop and commercialize complex sterile injectable products and a state-of-the-art R&D laboratory in California;
- Maintains Hikma’s strong regulatory track record. Custopharm has consistently obtained regulatory approval for new products with four first-to-market FDA ANDA approvals, including one CGT exclusivity for Calcitonin Salmon, which was launched in May 2021;
- Strengthens Hikma’s platform for future growth. Custopharm is a growing business and Hikma expects it to generate full year 2021 revenue in excess of $80 million and for the acquisition to be accretive to Hikma’s Injectables operating margin.
“This acquisition provides Hikma with an attractive opportunity to further strengthen our U.S. injectables business, by adding an attractive and profitable portfolio of marketed products and an exciting pipeline of future opportunities. Custopharm is an accomplished operator in the U.S. injectables market with a first-class scientific team and a strong regulatory track record. This acquisition is highly complementary to our existing business and adds high-quality and differentiated growth potential,” said Hikma CEO Siggi Olafsson.
Riad Mishlawi, president of Hikma Injectables, said, “With this acquisition, Hikma will have a differentiated U.S. portfolio of close to 130 injectable medicines – a more than fivefold increase over the last decade. Through this broad portfolio and by combining Custopharm’s strong R&D capabilities with our high-quality and extensive manufacturing footprint, we will be in an excellent position to better serve the growing needs of hospitals, doctors and patients. I look forward to welcoming the team at Custopharm and Leucadia to Hikma as we continue to grow and strengthen our Injectables business.”
“We’re excited to become part of Hikma, a global leader that shares our deep commitment to bringing generic products to market and into the hands of patients who need them. Water Street has been an outstanding partner in working with us to build an exemplary portfolio of complex generic products. We’re looking forward to building on this success,” said William Larkins, CEO of Custopharm and Leucadia.