Vectura bags respiratory biotech Activaero for $181M

Vectura CEO Chris Blackwell

U.K. drugmaker Vectura has signed a deal to absorb Germany's Activaero and its pipeline of airway treatments for €130 million ($181 million), betting the biotech's respiratory candidates can more than make up for the price tag.

Under the deal, Vectura will pay out about $132.5 million in cash and shares up front, and then hand out the rest by August 2015. In exchange, Vectura gets a proprietary, nebulizer-based technology for targeted inhalables and a broad pipeline of respiratory treatments, including the registration-ready Favolir, which treats severe adult asthma. Behind its lead drug, Activaero has a late-stage treatment for pulmonary hypertension and mid-stage candidates in children's asthma, severe influenza and a genetic lung disorder called alpha 1-antitrypsin deficiency.

Vectura expects to file a European application for Favolir by 2017 and head to the FDA in 2020, figuring it can commercialize the inhaler on its own and tap a global market of around $2 billion. The company didn't disclose its peak sales estimates for the drug but said they well eclipse the total deal consideration.

To date, Vectura has made its name on respiratory generics and a bevy of Big Pharma partnerships, including work with Novartis ($NVS), Baxter ($BAX) and Otsuka. Now, with the Activaero deal, the Chippenham, U.K., outfit is looking to deepen its pipeline of proprietary treatments and evolve into a specialty pharma company that can go it alone to market.

"The acquisition is highly complementary to Vectura's core capabilities, in-line with our strategic priorities and, I believe, will enable us to build a therapeutic specialist in airways diseases," CEO Chris Blackwell said in a statement. "... We see significant value in the combination of our respective respiratory expertise and believe that the combined company is well-positioned to extract even more value from our broader technology base and potentially retain greater economics from pipeline assets."

Meanwhile, Vectura and partner Sandoz are creeping up on GlaxoSmithKline ($GSK) with AirFluSal Forspiro, a generic of that company's multibillion-selling Advair, and Vectura could be in line for a sizable payday with QVA149, a Novartis COPD treatment with blockbuster potential.

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