London, UK, 4 December 2014: BTG Plc (BTG or the Company), the specialist healthcare company, is pleased to announce that it has entered into an agreement to acquire PneumRx Inc (PneumRx), a growing interventional pulmonology business, on a debt free cash free basis for an initial cash consideration of US$230 million (approximately £1471 million) and up to US$245 million (approximately £1561 million) in performance-related future milestone payments (the Acquisition).
The Acquisition will be funded in part by a cashbox placing with gross proceeds of approximately £150 million, representing approximately 5 per cent of the Company's market capitalisation based on 03 December 2014 closing share price, announced separately today (the Placing).
PneumRx is headquartered in Mountain View, California. It owns, manufactures and distributes the RePneu® Coil System (RePneu®), a minimally invasive treatment for advanced emphysema, which seeks to enhance patients' quality of life by improving lung function and exercise capacity. RePneu® is sold in 11 European countries including Germany, Switzerland, Italy and Spain and has a fully recruited US pivotal clinical trial currently underway. US approval is anticipated during 2016.
The rationale for the acquisition of PneumRx is that it:
· complements BTG's Interventional Medicine platform expanding it into the emerging area of interventional pulmonology, a developing medical discipline;
· adds RePneu®, a minimally invasive product backed by clinical evidence, which provides access to a specialty physician base and a market with high unmet need and significant growth potential;
· adds a fast-growing business that enhances BTG's European commercial platform and provides a significant US opportunity;
· has an attractive financial impact: annual sales potential over US$250 million, estimated ROI2 greater than 20% post US reimbursement3 and expected to be accretive to earnings from Year 4 onwards...
...The initial consideration payable for the Acquisition will be US$230 million (approximately £1471 million) on a debt free cash free basis.
BTG will make further contingent payments dependent on the achievement of performance-related targets. This comprises a milestone of US$20 million payable if PneumRx meets a revenue target in 2015 and a milestone of US$60 million if FDA approval is received before 31 December 2017. BTG may also pay tiered sales milestones of up to an additional US$165 million, the last of which is payable if annual sales reach US$500 million. Total contingent payments will not exceed US$245 million (approximately £1561 million) and will be funded from BTG's cash resources.
Closing of the acquisition is conditional on Hart-Scott Rodino approval in the US. That is expected to be received in early January 2015. |
