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Medicis makes successful bid for Graceway assets
SCOTTSDALE, Ariz.—Medicis, a specialty pharmaceutical company focused on the treatment of dermatological and aesthetic conditions, has announced that it emerged as the successfully bidder at Graceway Pharmaceuticals, LLC's bankruptcy auction for substantially all of Graceway's outstanding U.S and Canadian pharmaceutical assets. Graceway filed its Chapter 11 bankruptcy protection on Sept. 29, 2011. Per the terms of the bid, Medicis will pay Graceway a purchase price of $455 million, after which it will receive Graceway's commercial pharmaceutical product portfolio, which currently consists of prescription products in several fields including dermatology, respiratory and women's health specialties, as well as certain other assets.
"We are pleased to announce this strategic acquisition of the Graceway product portfolio, and the ability to broaden our presence within dermatology," Jonah Shacknai, Chairman and Chief Executive Officer of Medicis, said in a press release. "We anticipate near-term positive cash flow as we market certain newly acquired Graceway products which are currently approved for various dermatological and women's health conditions. Additionally, we are very pleased to be adding to our pipeline several mid- and late-stage products with a combined annual net sales peak potential of over $500 million in the dermatology and women's health categories."
The bid gains Medicis a strong selection of products from a varied portfolio. As a result of the auction, it has gained a formulation-stage dermatology project with an applied-for patent as well as projected annual peak sales of more than $200 million; a dermatology chemical entity product in Phase II with patent protection through 2016, a potential patent term extension of up to five years and projected peak sales of more than $200 million; and also a nearer-term women's health product, which has completed Phase II and is entering Phase III, also with an applied-for patent and projected peak annual sales of more than $100 million.
Medicis will also have the opportunity to launch two recently approved line extensions for the Zyclara franchase. Zyclara is a dermatological product, and Zyclara Cream 3.75% and 2.5% are indicated for the treatment of external genital and perianal warts, while Zyclara 3.75% is also indicated as a topical treatment for clinically typical visible or palpable AK of the face or balding scalp in immunocompetent adults.
Some of the other Graceway pharmaceutical products that Medicis will acquire include the Maxair Autohaler for the prevention and reversal of bronchospasm in patients with reversible bronchospasm (including asthma), Estrasorb for the treatment of moderate to severe vasomotor symptoms (hot flashes) related to menopause and Metrogel-Vaginal 0.75% for the treatment of bacterial vaginosis. Also from the dermatological program, Medicis will acquire Atopiclair Nonsteroidal Cream to manage symptoms related to dermatoses (including atopic dermatitis and allergic contact dermatitis) and Aldara Cream for the treatment of clinically typical, nonhyperkeratotic, nonhypertrophic actinic keratoses on the face or scalp; the topical treatment of biopsy-confirmed, primary superficial basal cell carcinoma in immunocompetent adults; and the treatment of external genital and perianal warts. These products represent annual revenues of more than $125 million.
The transaction is subject to approval by Graceway's board and the execution of a definitive asset purchase agreement, which will include customary closing conditions such as clearance under the Hart-Scott-Rodino Act and approval by the bankruptcy court. Medicis expects the acquisition to be accretive to the company in 2012 and will update its financial guidance upon the closing of the transaction.
SOURCE: Medicis press release