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Catalent to snap up Paragon
Posted on Monday, 15 April 2019 14:18
Catalent is buying US-based contract drug manufacturer Paragon Bioservices for USD 1.20 billion on a cash and debt-free basis.

Subject to the usual raft of closing conditions and the expiration of the waiting period under US antitrust laws, the deal is slated to complete in the second quarter of 2019.

Through the deal, Catalent will add capabilities in one of the fastest growing areas of healthcare- the potentially USD 40.00 billion addressable market for gene therapy- to position itself for accelerated long-term growth.

At 30th June 2019, pro forma net leverage ratio is expected to be 4.0x, with the company planning to deleverage to 3.5x within 12 to 18 months of closing.

Headquartered in Baltimore and backed by private equity firms Camden Partners and NewSpring Capital, Paragon develops and manufactures biopharmaceutical products.

Its offerings include recombinant viral vectors, next generation vaccines and gene therapies that inject nucleic acid into patient’s cells to help treat and prevent diseases.

The company also provides services such as master and working cell and virus banks, as well as segregated facilities for housing mammalian and insect microbial.

Paragon is expected to generate revenue of over USD 200.00 million in 2019, with 90.0 per cent of this already reflected in signed contracts, consolidating its position as the leading player in the gene therapy industry.

Zephyr, the M&A database published by Bureau van Dijk, shows there have been 451 deals targeting pharmaceutical and medicine manufacturers announced worldwide since the beginning of 2019.

The biggest of these, and the third largest transaction ever for this sector, involved Bristol-Myers Squibb agreeing to buy Celegne for USD 74.00 billion.

Other targets include AstraZeneca, Aphria, Brammer Bio and Karo Pharma.

Reuters notes that the potential deal follows a recent trend of drug companies targeting the gene therapy industry, in which treatments for rare diseases carry a high price tag.

In February, Roche bought Spark Therapeutics for USD 4.80 billion, and Biogen agreed to acquire Nightstar Therapeutics for USD 800.00 million in March.

© Zephus Ltd