Dr. Reddy's Announces Plans to Acquire OctoPlus for EUR 27 Million ($35.7 Million)
Dr. Reddy’s is planning to acquire the specialty injectable company OctoPlus for approximately EUR 27.4 million ($35.7 million) in cash to strengthen its technological capabilities in drug delivery. The companies have reached a conditional agreement on the acquisition and a formal offer memorandum is expected shortly. The offer of EUR 0.52 per share represents a premium of OctoPlus’ most recent closing price and was unanimously approved by the OctoPlus board.
According to an Oct. 22, 2012, OctoPlus press statement, Dr. Reddy’s has been following the activities of OctoPlus for some time and is particularly interested in OctoPlus’ expertise in drug formulation and difficult-to-formulate injectables. Following the acquisition, Dr. Reddy’s intends to position OctoPlus as a complex injectable research center. In addition, OctoPlus’ identity and head office will be retained.
One of OctoPlus’ lead product candidates is Locteron, a controlled-release formulation of interferon alpha that is currently in clinical trials as a potential treatment for hepatitis C. OctoPlus was developing the drug with Biolex Therapeutics. However, Biolex filed for bankruptcy earlier this year.
“The intended public offer price reflects the value of OctoPlus after the recent value erosion of Locteron,” Jan Egberts, CEO of OctoPlus, explained in the press statement. “Over the last few months the value of Locteron has significantly eroded, due to the ongoing emergence of all oral hepatitis C treatments, which ultimately resulted in the recently initiated bankruptcy liquidation filing of Biolex.”
According to Egberts, OctoPlus has reviewed several strategies for the company and believes that the intended offer by Dr. Reddy’s will be the best option for the company.
Dr. Reddy’s says that it does not expect the global number of employees of the combined company to materially change because of the offer. However, OctoPlus’s supervisory board will be reduced from five to three members.
The offer memorandum is expected to be submitted for approval within five weeks and the offer, if made, will commence during the first half of December.