Amneal, Impax Close Merger; To Close California Manufacturing Facilities
Amneal Pharmaceuticals, a Bridgewater, New Jersey generic-drug manufacturer and Impax Laboratories, a Hayward, California-based specialty pharmaceutical company, have closed on their previously announced business combination. Following the close of the deal, the combined company, Amneal Pharmaceuticals, Inc., announced plans to close its facilities and operations in Hayward, California and reduce its workforce by approximately 550 positions. The move follows an analysis of the combined company’s current and future product portfolios, plant capacities, overlapping capabilities, and cost structure.
Amneal says it will immediately implement plans to phase out its Hayward facilities with an expected completion timeline of approximately 15 months. Amneal expects to transfer products manufactured at the Hayward facility to other facilities in the US and India. Amneal expects the facility closures to reduce its workforce by approximately 550 positions. Additional details regarding the financial impact and pre-tax restructuring charges will be provided in a future company filing.
Amneal and Impax announced the completion of their merger on May 7, 2018 to create what the companies say is the fifth largest generic-drug business in the US. Amneal says it expects to generate annual double-digit revenue and achieve annual cost synergies of approximately $200 million within three years. The company says that the majority of the savings will result from the complementary nature of the companies’ combined operations as well as margin-enhancing product-transfer opportunities. In 2018, the company is targeting to realize synergies of $30 million to $35 million with 50% of those savings in research and development, 30% in selling, general and administration, and 20% in manufacturing.
The combined company has a generics portfolio with more than 200 differentiated product families marketed in multiple dosage forms, holds a number one or number two position in a number of its marketed products, and has a growing specialty franchise targeting central nervous system disorders and anti-parasitic infections, according to the company.
The generic-product portfolio of the combined company includes approximately 149 abbreviated new drug applications (ANDAs) with the US Food and Drug Administration and 135 projects in active stages of development, with nearly half of all pipeline products exclusive first-to-file, first-to-market, or other which have three or fewer competitors estimated at the time of launch, according to the company. In 2018, Amneal says it is targeting to file more than 30 ANDAs.
Under the combined company, Amneal says it expects to annually invest approximately 10% of net revenues in research and development (R&D), with a focus on the strategic development of high-value products within generics and specialty pharmaceuticals. The company has products across nearly all dosage form, including solid oral dose, softgels, injectables, topicals, transdermals, inhalation, complex molecules, and drug-device combinations, with R&D and manufacturing sites in the US, India, and Ireland.
Additionally, the company has a foundation for commercial entry into biosimilars through in-licensed products in various stages of development. Concurrent with the closing of the business combination with Impax, Amneal entered into a licensing agreement for the US market, with MabXience S.L., a Lugano, Switzerland-based biopharmaceutical company, its biosimilar candidate for Roche’s Avastin (bevacizumab).
Also concurrent with the closing of its business combination with Impax, Amneal acquired Gemini Laboratories, LLC, a company focused on marketing and sales of branded pharmaceuticals for $117 million. Gemini’s portfolio includes licensed and owned, niche and mature branded products, and a pipeline of 505(b)(2) products for niche therapeutic areas. The 505(b)(2) procedure refers to a pathway created by the Hatch-Waxman Amendments of 1984, with 505(b)(2) referring to a section of the Federal Food, Drug, and Cosmetic Act. It applies to various uses, including changes in dosage form, strength, route of administration, formulation, dosing regimen, or indication. Gemini’s lead product, Unithroid (levothyroxine) is detailed primarily to endocrinologists and primary care physicians through a contracted salesforce. Gemini has a long-term distribution agreement for Unithroid with Jerome Stevens Pharmaceuticals, a Bohemia, New York-headquartered pharmaceutical company.