CLIN.L Share News (CLIN)

(Sharecast News) - Clinigen Group shares jumped on Wednesday after the company signed an agreement with Novartis to acquire the US rights to its Proleukin drug for up to $210m in cash.Clinigen, which already acquired the rights to Proleukin outside the US in July, will pay an initial $120m, with $60m deferred over the next 12 months and then a further $30m depending on the drug's sales.In the year to 30 June 2018, metastatic melanoma and metastatic renal cell carcinoma treatment Proleukin made US-based revenue of $60.0m according to IQvia, with the drug's gross profit margin expected to be similar to other specialty medicines within Clinigen's Commercial Medicines division.As such, the acquisition is expected to be "modestly" EPS accretive in the current financial year as the product transitions to the AIM traded company, and at least 25% accretive in the first full financial year.Shaun Chilton, chief executive of Clinigen, said: "As part of Commercial Medicines, Proleukin is an excellent fit within our oncology and infectious disease medicines as well as diversifying our wider portfolio - it will be the largest product in the portfolio in terms of current sales. The product has significant potential for revitalisation, which will provide further breadth and diversity to the portfolio and material increases in revenues."The company currently owns three product assets within the US, Foscavir, Ethyol and Totect, with commercial rights for the former currently licensed to Pfizer and to Cumberland Pharmaceuticals for the other two."For Clinigen as a whole, Proleukin creates an ideal platform to expand our existing footprint in the higher value US market and therefore enables us to exploit other opportunities across the business. This follows our acquisition last year of CSM and iQone which strengthened our Continental European footprint. At the financial level, the combination of this deal structure and the group's cash generative nature will ensure our debt profile reduces quickly over the next year," said Chilton.For the six-month period ended 31 December, the company said it expects adjusted EBITDA to have expanded from £34.4m to £41.8m and also reported that it has increased its debt facility from £300m to £375m, with the terms of the extended debt remain unchanged and the facility in place until October 2023.Clinigen's shares were up 13.71% at 838.60p at 0923 GMT.