Italian rare disease specialist Chiesi Farmaceuti has agreed a €1.18 billion deal to acquire the Irish company behind a breakthrough therapy for a rare and painful skin disease that mostly affects children.
The price may rise to €1.4 billion if Amryt Pharma’s Filsuvez delivers on certain targets. The drug, approved by EU medicines regulators last year, accelerates the healing process for patients with epidermolysis bullosa (EB) when their skin blisters. Though not a cure for this disease, known as “butterfly skin” disease because of the fragile nature of patients’ skin that can blister at the merest touch, it is the first approved therapy for the condition.
“EB can affect every organ in the body except the brain,” said Jimmy Fearon, chief executive of Debra Ireland which represents about 300 Irish patients, many of them children, who suffer from the condition. “The worst part is the bandage changes. It is like having third-degree burns and it takes three hours a day.”
The genetic condition affects around one in every 20,000 children. It causes a breakdown in the natural proteins that hold the skin together. Patients with severe forms of EB suffer from severe, chronic blistering, ulceration and scarring of the skin. They are also more prone to a form of skin cancer, infections and the risk of premature death.
Chiesi has agreed to pay $14.50 in case for every American depositary share (ADS) in Amryt – equivalent to $2.90 per ordinary share –, which it said was a 107 per cent premium to the price the ADSs traded at last Friday, January 6th. That puts a figure of $1.25 billion (€1.18 billion) on the initial purchase price.
The Italian company has also agreed to pay up to an additional $2.50 per ADS – 50 US cents per ordinary share – “payable if certain milestones related to Amryt’s product Filsuvez are achieved”. The brings the potential final price for the Irish business to $1.48 billion (€1.4 billion).
For Amryt cofounder and chief executive Joe Wiley, who holds a stake of around 2.33 per cent of the business, including vested stock that has not yet been exercised, that means a €27.5 million pay-day, a figure that could rise to €32.6 million if the earnout delivers. Dr Wiley also has unvested stock that, depending on the terms of the deal, could add up to a further €6.1 million to that figure.
Other company executives share a stake of around 3.33 per cent between them, worth €39.3 million initially, and potentially up to €46.6 million.
Dr Wiley said he believed Chiesi was a good fit for the Irish business.
“Chiesi is aligned with Amryt’s commitment and passion and I believe Chiesi will further maximise the value of Amryt’s current portfolio and pipeline and, most importantly, will accelerate our ability to reach more patients in need globally,” he said.
“The board evaluated the transaction through a thoughtful process that included engagement with both strategic and financial parties against Amryt’s stand-alone prospects and determined that the compelling and certain cash consideration and meaningful upside presented by the CVRs [contingent value rights] provides superior risk-adjusted value relative to Amryt’s stand-alone prospects.
He said he was “incredibly proud” of what Amryt had accomplished for patients, their families, healthcare professionals and shareholders in the eight years since the business was established in 2015.
Marco Vecchia, chief executive of Chiesi, said his company hoped the takeover would make Amryt’s therapies available to even more patients who may require them.
Headquartered in Parma, family-owned Chiesi operates in 30 countries worldwide and employs more than 6,000 people.
“With this transaction, we are further expanding our commitment to people living with rare diseases, the majority of which still have no cure or approved treatment. This addition of the Amryt portfolio, as well as their expertise, will help us on our journey to bring medicines to patients, no matter how rare their condition may be.”
The transaction has been unanimously approved by the boards of both companies, with Dr Wiley saying Amryt believed it was in the best interest of its shareholders, and is expected to close by the end of the first half of this year.
Amryt’s top shareholders – funds managed by Athyrium Capital Management LP and Highbridge Capital Management as well as founders Dr Wiley and Rory Nealon and company chairman Ray Stafford – have agreed to back the arrangement, which will involve a scheme of arrangement in the UK high court.
Cathal Friel, an early investor in Amryt and currently chairman of Dublin-based life sciences company Poolbeg Pharma, said the deal crystallised what was “probably Ireland’s fastest billion-dollar-plus company creation and has shown that it is possible to create real unicorns out of Ireland”.
Amryt was advised by Moelis & Company, and law firms Cooley and Gibson Dunn & Crutcher. Centerview Partners advised Chiesi on the financial side of the deal with Dechert acting as legal adviser.