Amneal Pharmaceuticals and Impax Laboratories join forces.
East coast-based generics company Amneal Pharmaceuticals is merging with west coast-based specialty pharma company Impax Laboratories to form what the companies claim will be the fifth largest generic-drug company in the US.
Privately held, New Jersey-based Amneal Pharmaceuticals was founded in 2002 and is a fast-growing generics company with operations in North America, Europe and Asia. Recently the company has been focused on expanding its portfolio to include complex dosage forms. Impax Laboratories, headquartered in California, has specialized expertise in formulation and drug delivery for controlled-release and other specialty generics products, but also develops branded drugs for the treatment of central nervous system disorders.
"In the 15 years since our family founded Amneal, we have established the company as a leader in the U.S. generic pharmaceuticals industry, and today marks an important milestone in these efforts," said Chirag Patel, Co-Chief Executive Officer and Co-Chairman of Amneal. "This transaction combines the complementary strengths of both Amneal and Impax to create an even stronger company with the diversification, capabilities and resources to deliver enhanced value for patients, new opportunities for our collective employees and increased growth and value creation for shareholders.
The new company, which will retain the Amneal Pharmaceuticals name, will have revenues ranging from $1.75 billion to $1.85 billion. The companies expect to realize annual cost savings of $200 million within three years of the close of the deal. The merger has been approved unanimously by the Boards of Directors of Amneal and Impax and is expected to take place in the first half of 2018, subject to regulatory approvals and approval by Impax shareholders.
Once combined, Amneal Pharmaceuticals will have a portfolio of approximately 165 generic product families covering all dosage forms and a pipeline of greater than 300 products that have been filed with the US Food and Drug Administration (FDA) or are actively being developed. Nearly 50% of these pipeline products are, according to the companies, exclusive first-to-file, first-to-market or other high-value opportunities with three or fewer competitors estimated at the time of launch.
"This combination delivers on several key stated growth objectives for Impax," said Paul Bisaro, President and Chief Executive Officer of Impax. "By combining Amneal and Impax, we create a more diversified company with one of the industry's leading high-value generic product pipelines and a growing specialty business. Our combined portfolio will be supported by global, high-quality development and manufacturing capabilities."
Amneal and Impax shareholders will own approximately 75% and 25% of the combined company, respectively. The new board of directors will have six members appointed by Amneal and five members appointed by Impax. Amneal's founders and Co-CEOs, Chirag and Chintu Patel, will serve as Co-Chairmen of the combined company's board of directors. Bisaro will take the CEO position, while Impax’s Senior Vice President, Finance and CFO, Bryan Reasons, will serve as the company’s new CFO. The merged company will have over 6500 employees.
"This transaction is financially compelling as we expect the combination to be accretive to Impax's standalone adjusted per share earnings in the first 12 months and generate double-digit growth in revenue and adjusted EPS over the three years following the close of the transaction. We expect to achieve annual cost synergies of approximately $200 million within three years," Bisaro said. "The anticipated strong cash flows from the combined company allow for the repayment of debt and the ability to meaningfully invest in our business."