Jazz Pharma To Acquire Gentium For About $1 Bln

(RTTNews) - Ireland-based biopharmaceutical company Jazz Pharmaceuticals plc (JAZZ) has agreed to acquire Italian drugmaker Gentium S.p.A. (GENT) in a deal valued at about $1 billion, the two companies said Thursday. The deal will enable Jazz Pharma to expand its portfolio of rare disease drugs.

Gentium is focused on the development and manufacturing of therapies to treat and prevent a variety of rare diseases and conditions that currently have few or no treatment options, including orphan vascular diseases related to cancer treatments.

Gentium's lead product candidate is Defitelio or defibrotide, a treatment for severe hepatic veno-occlusive disease or VOD in adults and children undergoing blood stem cell transplantation therapy.

Jazz Pharma noted that the deal would add a significant growth product for the company in the European Union and rest of world markets. Defitelio is highly complementary to Jazz Pharma's experience in and focus on orphan diseases in the area of hematology/oncology.

Under the terms of a definitive agreement, a subsidiary of Jazz Pharma will make a cash tender offer of $57.00 per share for all outstanding Gentium ordinary shares and American Depositary Shares or ADS. The offer price represents a 2.4 percent premium to Gentium's closing stock price on Thursday of $55.65 per share.

This transaction has been approved by the Jazz Pharma as well as Gentium boards of directors, and is expected to close in the first quarter of 2014. Following the closing of the tender offer, Jazz Pharma plans to cause Gentium to seek to delist that company's ADS from Nasdaq and to terminate the deposit agreement relating to the ADS.

VOD is a rare, but serious condition in which the veins in the liver become blocked or damaged by the high doses of chemotherapy and radiation as cancer treatment, leading to liver dysfunction. Defibrotide was designated an 'orphan medicine', a medicine for rare diseases, in July 2004 for the treatment and prevention of hepatic VOD.

In October 2013, the European Commission granted marketing authorization for Defitelio for the treatment of severe hepatic VOD in adults and children undergoing hematopoietic stem cell transplantation. In November, the EU granted Orphan Drug Designation for Defitelio for the prevention of Graft versus Host Disease or GvHD.

Defitelio has also been granted Orphan Drug status by the U.S. Food and Drug Administration or FDA, the European Medicines Agency, the Korean Ministry of Food and Drug Safety, both to treat and to prevent VOD. The drug has also been granted Orphan Drug Status by the Commonwealth of Australia-Department of Health for the treatment of VOD, and Fast Track Designation by the FDA to treat VOD.

Jazz Pharma said it has entered into support agreements with certain shareholders of Gentium, including members of the board of directors and management team of Gentium. Under the support agreements, these shareholders have agreed to tender their shares and ADS, representing about 15 percent of the outstanding Gentium ordinary shares and ADS as of the date of the agreements.

Dr. Khalid Islam, chairman of the board of directors and chief executive officer of Gentium said, "We believe that Jazz Pharmaceuticals' commercial and clinical expertise, and existing multi-national infrastructure, will help realize the value of Defitelio to patients, as the first treatment approved in the European Union for the treatment of severe hepatic VOD."

Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals said, "Because Defitelio is already approved in the EU, the acquisition would add a new orphan product that has potential for short- and long-term revenue generation, high growth and expansion of our multi-national commercial platform."

Jazz Pharma expects to finance the deal with cash on hand, the proceeds from an incremental term loan, and revolver borrowings under its existing senior secured credit facility. The company noted that Barclays has provided a binding commitment letter for a $500 million incremental term loan, subject to the satisfaction of customary conditions.

JAZZ closed Thursday's regular trading session at $114.72, up $0.98 or 0.86 percent on a volume of 400,751 shares. In after-hours, the stock further gained $6.78 or 5.91 percent to $121.50.

GENT closed Thursday's trading at $55.65, down $1.30 or 2.28 percent on a volume of 130,137 shares. However, in after-hours, the stock gained $1.10 or 1.98 percent to $56.75.