Upsher-Smith embraces biotech with $553M deal to buy Proximagen

About four years ago, Upsher-Smith Laboratories decided to inject a little biotech personality into its corporate body by way of taking a minority interest in the U.K.'s Proximagen, a developer with a pipeline of CNS projects. Today, the generics company went for the full makeover, agreeing to pay up to $553 million for the remaining shares of Proximagen and vaulting directly into one of the most hazardous arenas in the industry.

In the deal, Upsher-Smith will snap up Proximagen shares for $347 million, holding up $206 million in prize money for the successful development of two of the company's pipeline therapies: An obesity drug dubbed PRX00933 and the rheumatoid arthritis therapy VAP-1. Shareholders will gain contingent value rights for those programs, much like Sanofi provided for the MS drug Lemtrada when it acquired Genzyme for $20 billion. Proximagen has a total of four CNS drugs in the pipeline.

There's been a considerable amount of wheeling and dealing for U.S. biotechs in recent months, but British biotechs have been suffering from a dearth of M&A deals. Proximagen CEO Kenneth Mulvany says this buyout may shake some of the cobwebs off the industry's deal table.

"This deal demonstrates that the UK biotechnology sector can, with supportive investors, bring together scientific excellence and business acumen and generate significant returns for shareholders," said Proximagen Chief Executive Kenneth Mulvany.

Upsher-Smith says it plans to integrate Proximagen's R&D operations in Cambridge and London into its existing network. The company has a late-stage program underway in epilepsy.

- read the press release
- here's the Reuters report

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