LONDON (Alliance News) - Amryt Pharma PLC on Tuesday said it has agreed the all-paper acquisition of Aegerion Pharmaceuticals, a subsidiary of Novelion Therapeutics Inc, and intends to raise USD60 million in equity.
Shares in Amryt have been suspended as the deal is considered a reverse takeover under AIM rules.
An all-paper acquisition is an acquisition in shares and debt.
Amryt intends to raise the USD60 million concurrent with the closing of the Aegerion deal and said a number of Aegerion bondholders have agreed to backstop the equity raise.
The equity raise is to be placed at a 20% discount to the implied transaction equity value. The pre-money implied transaction equity valuations for the companies are USD120 million for Amryt and USD190.7 million for Aegerion.
The acquisition, which has been endorsed by 34% of Amryt shareholders and more than 67% of Aegerion's bondholders, will create a rare disease business with two approved products, Lojuxta and Myalept. These drugs treat familial hypercholesterolemia and generalised lipodystrophy respectively.
Familial hypercholesterolemia is a genetic disease in which patients have excessive cholesterol while generalised lipodystrophy is another genetic disorder in which a person experiences near-total loss of body fat.
Amryt stakeholders are to receive a contingent value right of as much as USD85 million, either in cash of stock, at the election of its board provided regulatory approval and commercialisation milestones for its AP101 drug candidate are met.
The combined group had a pro-forma combined revenue of USD136.5 million in 2018 and the acquisition could result in between USD25 million and USD40 million of expense synergies in 2020.
New loan facilities will be put in place for the combined group, key terms of which have already been agreed, and Amrty's existing facility will be repaid.
The company will have a combined global headquarters in Dublin and a US headquarters in Boston, Massachusetts and enlarged group will be re-admitted on AIM and Euronext Growth with plans for a dual listing on the NASDAQ.
Amryt, Aegerion, and Aegerion's stakeholders have entered a restructuring support agreement and Aegerion has filed for Chapter 11 bankruptcy in the US, with the acquisiion to take place via a plan of reorganisation. Once the bankruptcy court approves the deal, Amryt will acquire the reorganised company in exchange for Amryt stock.
To facilitate this entry into bankruptcy, Aegerion has arrange for financing to allow it to continue to operate during the Chapter 11 process. Agerion's bondholders have agreed to this.
USD125 million of new 5% convertible notes are to be issued, which mature in 5.5 years and are convertible into Amryt equity at a 20% premium o the implies transaction valuation.
Novelion Interim Chief Executive Ben Harchbarger said: "The combination of Amryt and Aegerion will create a financially stronger and well-capitalized rare disease company with two commercial products and a pipeline of late stage rare disease products. Amryt's executive management team has the depth of experience to commercialize Aegerion's marketed products, as demonstrated by its ability to grow sales of Lojuxta in the European market, to develop and, if approved, commercialize Amryt's late stage product candidate, AP101."
