LONDON: Dechra Pharmaceuticals has agreed terms to acquire the worldwide rights to the Osurnia product portfolio from Elanco Animal Health Incorporated for a total consideration of USD 135 million.
The acquisition will be financed from the Group’s existing cash and borrowing facilities. Completion is expected before the end of June 2020 following the satisfaction of a number of conditions precedent.
The addition of Osurnia to the Dechra dermatology portfolio will significantly enhance its presence in this key therapeutic area and complete its otitis externa service offering to veterinarians.
Osurnia is a long acting treatment for otitis externa (inflammation of the outer ear) in dogs. Dechra is acquiring the worldwide marketing rights; the rights to the intellectual property; the marketing authorisations and associated regulatory documentation; supply contracts with third-parties in relation to the raw material and manufacture of the finished product, and some existing inventory of the product. No other assets are being transferred to Dechra.
For the year ended 31 December 2018, the reported revenues for Osurnia were USD 31.2 million. The acquisition is expected to be earnings enhancing for the financial year ending 30 June 2021, assuming completion before the end of June 2020.
Dechra’s acquisition of Osurnia is related to Elanco’s acquisition of Bayer AG’s animal health business, which is subject to regulatory approval from the European Commission and the Federal Trade Commission. Completion of Dechra’s acquisition of Osurnia is conditional upon approval of Dechra as a suitable buyer by the European Commission and the Federal Trade Commission in that context. Dechra is responsible to provide remedies in the unlikely event that any territory objects to the acquisition.
Dechra may be required to pay Elanco a break fee of USD 13.5 million for failing to perform certain actions under the terms of the Asset Purchase Agreement by 24 June 2020 or if the transaction is terminated by Dechra prior to 20 April 2020.
Ian Page, Dechra’s Chief Executive Officer commented: “We are delighted to acquire the worldwide rights to Osurnia. We are already present in the otitis externa space with Canaural and our range of ear cleaners. The addition of Osurnia will allow us to offer an extended range of solutions for veterinarians to manage otitis externa and offer the best treatment for the pet taking into consideration the veterinarians clinical preference and the owners lifestyle. Dechra’s expertise in this arena will bring a lot of added value to otitis externa management for veterinarians.”