Emergent BioSolutions established itself as a leading biodefense company by selling Anthrax vaccines en masse to the federal government in the wake of Sept. 11 terrorist attacks and subsequent threats of bioterrorism.
The Rockville-based company now aims to generate fresh revenue and expand beyond its roots as a federal contractor by purchasing drug companies that already sell moneymaking products to the commercial market.
The company took another step toward that goal Tuesday when it agreed to buy Winnipeg, Manitoba-based life sciences company Cangene for $222 million, or $3.24 per share. The combined firm would count roughly 1,400 employees.
The acquisition is slated to close in the first quarter of 2014, pending the approval of U.S. and Canadian regulators. Both boards have already approved the deal.
Cangene is best known for its flagship drug WinRho, which is used to treat a blood disorder known as immune thrombocytopenic purpura, as well as hemolytic disease of the newborn. It also produces drugs for patients with Hepatitis B and chickenpox.
In addition to commercial products, Cangene’s biodefense business sells three drugs to the U.S. government, including treatments for smallpox, botulism and Anthrax.
In total, Cangene collected $127.3 million in revenue for the fiscal year ending July 31, 2013. The firm turned a profit of $1.4 million that same year, up from a net loss of $28.3 million during prior fiscal year.
In addition to fresh revenue streams, the acquisition provides Emergent with a fully developed sales and marketing operation focused on the commercial market. That will make it easier and more cost effective for Emergent to sell future products, said chief executive Daniel Abdun-Nabi.
“It’s a start for us. It provides a commercial infrastructure,” he said. “We look to not only build on the revenues in that portfolio but identify products that are synergistic with these.”
Indeed, the company’s spending spree may not be done. It plans to continue to look for potential acquisition targets, Abdun-Nabi said.
“We have a fairly extensive [merger and acquisition] analysis that we undergo,” Abdun-Nabi said. “There are a lot of potential opportunities that we evaluate on an ongoing basis and this one just made a ton of sense.”
This is the second acquisition for Emergent this year. The company paid $26 million for the Healthcare Protective Products Division of Bracco Diagnostics in August, including a lotion that removes or neutralizes chemical warfare agents from skin.
Emergent had revenue of $214.6 million for the first nine months of 2013, up from $187.3 million during the same period last year. Net profit for the first nine months of the year was $15 million.
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