Amag Pharmaceuticals has agreed to pay $675m-plus to buy female health specialist Lumara Health in a deal that will see the latter firm broken up.
The transaction will also see the remainder of Lumara’s women’s health products – deemed to be outside Amag’s core interests – sold off to Ireland’s Perrigo for $82m.
Meanwhile, an additional $350m may be paid by Amag to Lumara’s shareholders based on sales performance, boosting the potential value of the deal above $1bn.
Amag’s primary objective in buying Lumara – which until this year was known as KV Pharmaceutical – is to gain ownership of Makena (hydroxyprogesterone caproate), a drug used in the management of pre-term labour that was approved by the FDA in 2011.
Makena brought in sales of $130m in the 12 months to end-August, an increase of more than 70% year-on-year, and will help Amag’s turnover rise to around $350m in 2015. There will be around $20m a year in potential cost savings, according to the company.
The buoyant growth for Makena has come despite competition from compounding pharmacies in the US, which have been making cheaper versions of the drug.
Lumara has been fighting in the courts to restrict the practice, and garnered support for its position after the FDA sent a warning letter to one compounder earlier this year for producing the drug in unsanitary conditions.
Adding Makena into its portfolio will give Amag an opportunity in future to increase sales of its own flagship product Feraheme (ferumoxytol), used to treat iron-deficiency anaemia in patients with chronic kidney disease, through the maternal health channel.
Amag tried and failed to get a broader indication for Feraheme approved by the FDA earlier this year, but has not given up on the idea. If it can achieve this objective and get approval for use of the drug across the board in iron-deficiency anaemia it could promote the drug alongside Makena in the women’s health category. Feraheme is sold outside the US by Takeda as Rienso and was approved in Europe in 2012.
Meanwhile, another key driver of the deal is thought to be the potential to push sales of Lumara’s drug using Amag’s commercial base.
Under the terms of the acquisition, Lumara will operate as a separate business within Amag reporting to the Amag’s chief executive William Heiden. Some of Lumara’s executives will join Amag when the deal closes.
Elsewhere, Perrigo CEO Joseph Papa said buying Lumara’s female health products – Clindesse (clindamycin), Gynazole-1 (butoconazole) and Evamist (estradiol) – made good sense, particularly as it is already manufacturing two of them under contract