|Columbia Laboratories CEO Frank Condella|
In-transition drugmaker Columbia Laboratories ($CBRX) is looking to cash in on the high-growth market for outsourced drug development, snatching up U.K. CRO Molecular Profiles for $25 million.
Under the deal, Columbia traded $16.7 million in cash and about $8.3 million worth of shares for a CRO that cleared $9 million in revenue last fiscal year. Molecular Profiles handles drug development and manufacturing, employing more than 50 people and boasting a track record that includes work on more than half of the world's top-selling drugs.
For Columbia, the acquisition is a big step in the drugmaker's ongoing transition, CEO Frank Condella said. The company jettisoned 42% of its workforce last year after the FDA rejected a vaginal progesterone gel co-developed with Actavis ($ACT).
Now, Condella sees a way forward, buying "a growing, cash-flow-positive and profitable company with a large customer base that strengthens and significantly diversifies Columbia's revenue stream," he said in a statement. "We look forward to its continued growth as Molecular Profiles further penetrates the growing pharmaceutical outsourcing market for formulation development and manufacturing services."
Any future CRO revenue will bolster Columbia's existing business, which consists largely of royalties tied to Crinone, a fertility gel marketed by Actavis in the U.S. and Merck Serono overseas.
- read Columbia's announcement