ANI Pharma (ANIP) to acquire Novitium Pharma



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ANI Pharmaceuticals, Inc. (“ANI” or the “Company”) (Nasdaq: ANIP) today announced the signing of a definitive agreement to acquire Novitium Pharma, a New Jersey-based private pharmaceutical company with development, manufacturing and marketing capabilities for $ 163.5 million, of which $ 89.5 million in cash and $ 74 million in equity plus two future cash earn-outs of up to $ 46.5 million. The transaction has been approved by ANI’s board of directors and is expected to close in the second half of 2021, subject to regulatory approvals and ANI shareholder approval, as required by Nasdaq listing standards, as described below. Novitium shareholders approved the transaction.

“Strengthening our well-established generics business with enhanced development capabilities and increased focus on niche opportunities is a key pillar of ANI’s growth strategy. The Novitium acquisition aligns with this strategy, adding a first-rate R&D engine that delivers sustainable growth through new product launches and offers growth opportunities through the 505 (b) (2) niche. The addition of a state-of-the-art US-based manufacturing facility and increased scale to our CDMO business are other attractive benefits of this acquisition. We also look forward to welcoming Samy, Chad, Vijay and the entire Novitium team to ANI, ”said Nikhil Lalwani, President and CEO.

“We expect the transaction to be immediately accretive to our Adjusted EBITDA. Upon closing of the transaction, our strengthened pro forma capital structure, including new senior credit facilities underwritten by Truist Securities and PIPE from Ampersand Capital Partners, will enable us to facilitate long-term growth, ”concluded Lalwani. .

Samy Shanmugam, Co-Founder and President, and Chad Gassert, Co-Founder and CEO, said, “We are delighted to join ANI as we enter this exciting next phase of growth at Novitium Pharma. We look forward to helping ANI execute on its strategy of growing its business, expanding and diversifying its product portfolio, and creating long-term value for its investors.

The transaction strongly positions ANI for future growth

  • Proven R&D engine fuels sustainable growth
    Novitium plans to launch more than 25 additional products in 2021 and 2022, including products bearing the Competitive Generic Therapy (“CGT”) designation of the United States Food and Drug Administration (“FDA”). The Company currently has 21 Abbreviated New Drug Applications (“ANDAs”) filed with the FDA and over 30 additional products under development. The Novitium management of Samy Shanmugam, Chad Gassert, Vijay Thorappadi and the whole team have an excellent track record of execution and efficiency from filing to launch. The integration of Novitium’s R&D operations will establish a center of excellence for ANI’s generic product development program.
  • Expands ANI’s R&D pipeline focused on niche opportunities
    Novitium is currently proposing three 505 (b) (2) candidates in oncology and hypertension. These 505 (b) (2) products will build on ANI’s growing focus on niche opportunities, including its first paragraph IV filing in 2020 and the ANDA filing for injectables in 2021.
  • Improves CDMO’s scale of operations and manufacturing capacity in the United States
    Novitium adds nine new clients to ANI’s growing CDMO business. Additionally, Novitium brings with it a 50,000 square foot facility in East Windsor, NJ, comprising 27 manufacturing suites and eight clinical suites supporting R&D, commercial manufacturing and packaging. Continued expansion of the 20,000 square foot building will add 18 new manufacturing rooms. The annual production capacity of Novitium is approximately two billion units in tablets, capsules, liquid suspensions and solutions, powders and powders for oral suspension, controlled release and potent compounds.
  • Compelling financial profile
    The combination is expected to have an accretive effect on ANI’s adjusted non-GAAP EPS in the first 12 months following closing. The transaction is expected to add approximately $ 15 million to adjusted EBITDA in H2 2021, assuming a mid-year 2021 close. The acquisition diversifies ANI’s revenue base by contributing to each of its reporting segments: Generics , Contract manufacturing, Royalties / Other and, following the launch of products from Novitium’s 505 (b) (2) pipeline, the Brand segment.

Transaction conditions and financing

Pursuant to the transaction, the purchase price of $ 163.5 million includes (i) a cash payment of $ 89.5 million and (ii) $ 74 million in equity. Novitium is also eligible to receive (i) $ 25 million in contingency payments upon meeting financial targets related to generic products and certain ANDA filing and (ii) $ 21.5 million in contingent payments in the event achievement of the financial objectives of the 505 (b) (2) products.

ANI will fund the transaction with a new $ 300 million B term loan, a $ 74 million equity issue to sellers and a $ 25 million PIPE investment by Ampersand Capital Partners. The facility also includes a new $ 40 million revolving credit facility. The new debt financing will be secured by substantially all of the assets of ANI and its subsidiaries and used for the cash portion of the acquisition and to refinance ANI’s existing senior credit facilities. The proposed capital structure further facilitates the sustainable growth of ANI.

Approvals

The transaction is expected to close in the second half of 2021, subject to the satisfaction of customary closing conditions, the approval of the relevant regulatory bodies, including authorization under the Hart-Scott Rodino Antitrust Improvements Act, and the approval of ANI’s shareholders in connection with the listing on the Nasdaq. due to the equity portion of the Novitum transaction and the shares that may be issued as part of the PIPE transaction.

Advisors

Bourne Partners, Truist Securities and Houlihan Lokey acted as financial advisers to ANI Pharmaceuticals. SVB Leerink acted as financial advisor to Novitium Pharma and its shareholders. Hughes Hubbard & Reed were legal advisers to ANI and Orrick, Herrington & Sutcliffe acted as legal advisors to Novitium and its shareholders.



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