Emergent BioSolutions Inc. said on Friday it plans to acquire Sanofi’s ACAM2000 business, the only vaccine licensed by the U.S. Food and Drug Administration (FDA) for active immunization against smallpox, in an all-cash transaction totaling up to $125 million.
ACAM2000 is the primary smallpox vaccine designed for use in a bioterrorism emergency, with more than 230 million doses having been supplied to the U.S. Strategic National Stockpile (SNS).
According to Emergent, the transaction supports the company’s plan to grow through the acquisition of revenue-generating products and businesses, leverages its core competencies in manufacturing and government contracting, and reinforces its strategic focus on providing preparedness solutions for public health threats.
“This transaction diversifies our portfolio and broadens our countermeasure franchise with a vaccine that is being stockpiled both in the U.S. and internationally,” Daniel J. Adbun-Nabi, president and CEO of Emergent, said. “We expect it to meaningfully contribute to revenue growth in 2018 and advance our efforts towards achieving our goal of $1 billion in total revenue by 2020. We further anticipate that ACAM2000 will help us achieve our goal of generating more than 10 percent of total revenue from international markets.”
A highly contagious disease, smallpox has a mortality rate as high as 30 percent, according to the Centers for Disease Control and Prevention (CDC). Because smallpox is classified as a bioterrorism agent, the U.S. and foreign governments are investing in countermeasures to protect the public from the threat of infection.
The transaction announced Friday will be comprised of a $97.5 million up front payment with up to $27.5 million in near-term contingent regulatory and manufacturing-related milestones.
The deal also would include Emergent’s acquisition of an existing 10-year contract with the CDC valued at up to $425 million that will be up for renewal in 2018. The contract is for delivery of ACAM2000 to the SNS and establishing U.S.-based manufacturing of the vaccine. Under the CDC contract, Emergent would complete the FDA licensure process and fulfill all remaining product deliveries to the SNS valued at up to about $160 million. The company said it expects that product deliveries will resume in 2018 after FDA licensure of the U.S.-based manufacturing facility.
Gaithersburg, Maryland-based Emergent also said it plans to negotiate a multi-year contract with the U.S. government to ensure the continued supply of ACAM2000 to the SNS.
The transaction, which is subject to antitrust regulatory approval, is expected to close later this year.