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Fresenius Kabi enters biosimilars market with acquisition of Merck KGaA’s Biosimilars Business
Fresenius Kabi announced on April 24, 2017 that it would acquire Merck KGaA’s biosimilars business, which is focused on oncology and autoimmune diseases, and includes an experienced team of more than 70 employees located in Aubonne and Vevey, Switzerland.
Fresenius Kabi expects first sales towards the end of 2019 and estimates business will achieve high triple-digit million sales from 2023 onwards based on the current product development schedule. Fresenius Kabi has agreed to pay single digit percentage royalties to Merck based on sales.
“Biosimilars are a fast-growing segment within the pharmaceutical market. Some of the largest biological branded products will go off patent over the next years. With this acquisition, Fresenius Kabi enhances its position as a leading player in the injectables pharmaceutical market and further diversifies its product portfolio. The acquisition creates a platform for further growth,” said Mats Henriksson, CEO of Fresenius Kabi, in the press release.
The purchase price will be up to €670 million (approximately US$730 million). Thereof, €170 million (approximately US$185 million) will be paid in cash upon closing. Approximately €500 million (approximately US$545 million) are milestone payments strictly tied to achievements of development targets. Analytical testing, clinical studies, quality requirements specific to biosimilars, as well as marketing and sales activities are expected to result in increased costs for Fresenius Kabi. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the second half of 2017.
The decision to divest biosimilars is aligned with Merck KGaA’s strategy for its healthcare business sector to focus on its pipeline of innovative medicines. “The divestment of our biosimilars business is a major step towards strategically aligning our R&D resources to our Healthcare priorities. We have increasing confidence in our biopharma pipeline and this transaction will help prioritize innovative drug development of high quality and first-to-market best-in-disease assets,” commented BelÃ©n Garijo, member of the executive board of Merck KGaA, Darmstadt, Germany and CEO Healthcare, in a press release. “The partnership with Fresenius will allow us to exploit our biosimilars portfolio to full potential while granting us a substantial return on prior investments.”
Source: Fresenius Kabi and Merck KGaA