Adma to Acquire Immune Drug AssetsBy
Adma Biologics, a Ramsey, New Jersey-based late-stage biopharmaceutical company focused on specialty plasma-based biologics, has signed a definitive agreement to acquire certain manufacturing and therapy-related assets in relation to an immune-disease drug candidate from Biotest Pharmaceuticals Corporation (BPC), a Boca Raton, Florida-based wholly owned subsidiary of Biotest AG, a Dreieich, Germany-headquartered supplier of plasma protein products and biotherapeutic drugs.
The transaction relates to Adma’s lead product candidate, a specialty plasma-derived, polyclonal, intravenous immune globulin (IGIV) for which Adma is pursuing an indication for treating primary immune deficiency disease. Adma has been working with BPC on resolving certain issues at BPC’s Boca Raton facility, where the IGIV drug candidate is manufactured, in connection with deficiencies identified by the US Food and Drug Administration (FDA) in a Complete Response Letter issued to Adma in July 2016.
Under the agreement, Adma will gain property, facilities, laboratories, equipment, and certain employees located at BPC’s Boca Raton site, including two commercial buildings totaling approximately 26,000 square feet on roughly 15 acres of land. The buildings house a plasma fractionation and purification plant of FDA-licensed biologics, testing laboratories, office space, ambient and cold storage warehouses, as well as a commercial scale monoclonal antibody production facility.
Adma will also gain FDA-licensed products, including Nabi-HB (hepatitis B immune globulin, human) and Bivigam (immune globulin intravenous, human), and a contract manufacturing and services agreement for a third party’s licensed hyperimmune globulin product.
For its part, Biotest will provide Adma with cash consideration totaling up to $40 million, consisting of: $12.5 million in cash upon closing; a $15 million unsecured subordinated loan at a 6% per annum interest rate and interest only through the life of the loan and final principal payment due in full at the end of a five-year loan period; and a firm equity commitment to invest an additional $12.5 million in future equity financings of Adma. Although there can be no assurances, it is presently anticipated that with ADMA’s cash on-hand forecasted at the time of the anticipated closing, plus the contractual capital commitments from Biotest, ADMA is expected to have sufficient cash for operations into the second half of 2018.
The consideration for the above listed assets, cash, and financing commitments to be given by Adma upon the closing of the proposed transaction includes the following: 50% of Adma’s capital stock, less one share (calculated as of immediately following the closing and on a post-closing issuance basis), consisting of (a) voting common stock equal to 25% of the issued and outstanding common stock of Adma and (b) non-voting common stock representing the balance of such 50% equity interest, less one share; the right for BPC to designate one director and one observer to Adma’s board of directors; and the transfer of ownership to BPC of Adma’s two wholly-owned plasma centers in Norcross, Georgia and Marietta, Georgia, effective January 1, 2019.
In addition, Biotest will maintain its existing distribution rights granted for the IGIV drug candidate in Europe, Near East and Middle East, and selected other territories. Biotest will also maintain its right of first offer to BPC for the distribution of potential future Adma-developed plasma based products in the territories. BPC will be entering into a standstill with Adma, which will limit BPC’s ability to control the company. BPC will also agree to a six-month lockup of the sale of Adma securities.
The transaction is subject to customary closing conditions, including shareholder approval, and is expected to close during the first half of 2017.
Source: Adma Biologics