Jazz offers $1bn for Italy’s Gentium

Jazz Pharmaceuticals has agreed a $1bn deal to acquire Italy’s Gentium and a recently-approved drug for a rare liver condition.

The $57 per share deal gives Jazz an immediate boost in its ex-US business as well as access to Gentium’s Defitelio (defibrotide) drug for the treatment of severe hepatic veno-occlusive disease (VOD) in adults and children undergoing hematopoietic stem cell transplantation.

The drug was approved in Europe in October, despite suggestions – voiced by Gentium itself earlier this year – that concerns about Defitelio’s benefit:risk profile might delay registration.

Shares in Nasdaq-listed Gentium closed just above $55.65 the day before the deal was announced. Ireland-headquartered Jazz, which like Gentium focuses on speciality pharmaceuticals, said it expects the transaction to close in the first quarter of 2014 and would immediately boost earnings.

If the acquisition goes through Gentium would be delisted from the Nasdaq and become privately-owned, said Jazz, whose top products are Xyrem (sodium oxybate) for narcolepsy and leukaemia drug Erwinaze/Erwinase (crisantaspase).

Gentium reported revenues of a little over €30m in the first nine months of the year – €24m of which came from Defitelio – with third-quarter sales of the drug at round €10m. Gentium also has a small business unit selling active pharmaceutical ingredients (APIs) which contributed the bulk of the non-Defitelio turnover.

Jazz expects to achieve revenues of around $870m this year, with around $570m of that total coming from Xyrem.

Gentium’s chief executive Dr Khalid Islam said the deal would allow it to tap into Jazz’s “commercial and clinical expertise, and existing multi-national infrastructure”, adding that “this all-cash transaction is in the best interest of our shareholders and employees”.

Meanwhile, Jazz CEO Bruce Cozadd said the acquisition “would add a new orphan product that has potential for short- and long-term revenue generation”.

The Ireland-based company expects to finance the deal with a combination of cash and proceeds from a $500m loan from Barclays.

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