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US$1.2 Billion Worth of Drugs for Concordia as they Acquire Covis

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Published on : Mar 11, 2015

The pharmaceutical and injectables unit of Covis Pharma has been bought by Concordia Healthcare for US$1.2 billion in cash. The effort has strengthened Concordia’s generics portfolio, riding the latest wave of pharmaceuticals M&A.

The Toronto based Concordia Healthcare will gain 18 branded and generic drugs in the bargain. This includes Nilandron for metastatic prostate cancer, the mild or moderate heart failure and atrial fibrillation drug Lanoxin, and the rheumatoid arthritis and lupus drug Plaquenil.

Concordia also expects to purchase over 50 per cent of the adjusted earnings of 2015, taking the US$20 million post merger cost cuts as financial aid.

The pharma company’s deal will have an immediate and a material impact, said Concordia CEO Mark Thompson. He added that the buyout also generates a larger scale and diversification for his company, consequently supporting its relatively aggressive growth plans. The drugs are supposed to add to Concordia’s current offerings in orphan drugs and medical devices.

US$52 million was the revenue expected by Covis in the fourth quarter of 2014. The year’s total was expected to reach between US$140 million and US$145 million. The volume is a substantial amount of the new sales that Concordia is to make. The latter company is expecting a full year 2014 revenue of US$119 million or US$ 122 million. Concordia reported its first profit in three quarters in the third quarter of 2014. The company is planning to finance the cash deal with a combination of equity, bonds, and bank debt.

Concordia has successfully gotten a large array of the ex Big Pharma products by acquiring Covis. In 2011, Covis had attained a U.S. rights to a handful of GSK drugs. This includes Fortax, an injectable antibiotic and Lanoxin, the cardiac drug.

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