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In a major consolidation move in US generic industry - Amneal Pharmaceuticals and Impax Laboratories on Tuesday said they have agreed to merge in an all-stock deal.
As a result of the transaction, Amneal will own approximately 75 percent and Impax shareholders will own approximately 25 percent in the combined company.
The combined entity will retain the name Amneal Pharmaceuticals, will have generics business that will rank as the fifth largest in the US by gross revenue, edging past India generic drug maker Sun Pharma.
While the New Jersey-based privately held generic maker Amneal was founded by two Indian-American brothers Chirag Patel and Chintu Patel in 1987, the California-based Impax - listed on New York Stock Exchange (NYSE) was founded in 1995 is largely into specialty drugs.
“The combined company is expected to have 2018 pro forma adjusted EBITDA of approximately USD 700 million to USD 750 million, which includes expected significant cost savings within the first full year of close,” the joint press release of Amneal and Impax said.
The combined company is expected to have 2017 pro forma net revenue ranging from USD 1.75 billion to USD 1.85 billion and pro forma adjusted EBITDA of approximately USD 600 million to USD 650 million in 2017 and USD 700 million to USD 750 million in 2018, each including USD 80 million to USD 120 million of annualized cost savings within the first full year of close.
Sun Pharma, the fifth-largest generics maker, clocked USD 2 billion in sales in FY17. Given that the company is facing headwinds in the US generics market, the revenues expected to be lower than the previous year's.
The significant cash flow generated will enable Amneal Pharmaceuticals to pay down debt, while also continuing to invest in R&D and high-growth specialty assets.
The merged entity will have a generics portfolio with approximately 165 differentiated product families marketed in all dosage forms.
The combined company will hold leadership position in a significant number of its marketed products.
The combination is expected to create one of the largest generic pipelines in the US, with approximately 150 pending ANDAs and 165 projects in active stages of development. Nearly half of all pipeline products are exclusive first-to-file, first-to-market or other high-value opportunities with three or fewer competitors estimated at the time of launch. The combination also adds a foundation for commercial entry into biosimilars with two in-licensed products, one filed and one near-term filing opportunity in development.
The combined company will include Impax’s high-margin specialty franchise, which is expected to provide stable cash flow and long-term growth through its innovative platform of products targeting CNS disorders, anti-parasitic infections and other select specialty therapeutic areas.
“This transaction combines the complementary strengths of both Amneal and Impax to create an even stronger company with the diversification, capabilities and resources to deliver enhanced value for patients, new opportunities for our collective employees and increased growth and value creation for shareholders,” said Chirag Patel, Co-Chief Executive Officer and Co-Chairman of Amneal.
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