Deal marks 'transformational acquisition' for Lannett, CEO Bedrosian says

PHILADELPHIA — Lannett Co. plans to acquire Kremers Urban Pharmaceuticals Inc., the U.S. specialty generic drug subsidiary of UCB S.A., in a $1.23 billion deal.

Lannett said late Wednesday that the acquisition will add a diversified commercial product portfolio of 18 products. Kremers Urban currently markets generic products that treat a range of conditions, including attention deficit hyperactivity disorder (ADHD), gastroesophageal reflux disease, hypertension and respiratory disease.

In addition, Kremers Urban has a strong product pipeline that includes 11 applications pending at the Food and Drug Administration, of which five include Paragraph IV certifications, as well as 17 product candidates in various stages of development, including one 505(b)(2) product opportunity, according to Lannett. The company said Kremers Urban’s product applications pending at FDA and products in development complement Lannett’s drug development program. Kremers Urban also has eight controlled substance products with barriers to entry in various stages of development, which would expand and enhance Lannett’s controlled substance portfolio.

The addition of Kremers Urban also will bring more research-and-development and regulatory expertise, particularly in the areas of difficult-to-manufacture products and Paragraph IV certifications, Lannett noted. As part of the transaction, Lannett would receive Kremers Urban’s recently inspected 381,000-square-foot facility in Seymour, Ind., which has substantial manufacturing and warehousing capacity, as well as dedicated product development space.

“For Lannett, this is a transformational acquisition that is an exceptional strategic fit and builds upon our stellar financial performance over the last several years. With Kremers Urban, we are adding a highly profitable business and creating a specialty pharmaceuticals company that has substantial size, scale and reach,” stated Arthur Bedrosian, chief executive officer of Lannett.

“The acquisition diversifies and augments our current product offerings and significantly enhances our opportunities for continued growth by expanding our pipeline with a number of large market opportunity and complementary product candidates,” Bedrosian added. “Kremers Urban brings considerable manufacturing capacity, a first-class research-and-development team and the potential for advancing our active pharmaceutical ingredients business. This transaction delivers on our objective to supplement and boost our organic growth with strategic acquisitions.  We will continue to seek opportunities to build our business and enhance shareholder value.”

According to Lannett, the combined company generated pro-forma revenue of more than $800 million for the 12 months ended June 30.

The acquisition agreement has been unanimously approved by the boards of Lannett and UCB and, pending regulatory approval and other customary closing conditions, the transaction is expected to close in the fourth quarter of this year.

In early June, Lannett announced the closing of its acquisition of Silarx Pharmaceuticals Inc., a manufacturer and marketer of liquid generic drug products. Financial terms of the deal, announced in mid-May, weren’t disclosed.