$130m deal for early-stage pharma firm Brabant
A SMALL pre-revenue pharmaceutical company backed by North West investor Aquarius Equity Partners has been sold to a listed US firm for up to $130m.
Brabant Pharma, which is registered to Aquarius’ address on Gartside Street in Manchester, has been purchased by Nasdaq-listed Zogenix for an initial $20m in cash and $15m in stock plus potential future milestone and royalty payments.
The company, which is due to begin clinical trials of its maiden product in the coming months, is working on a treatment for Dravet Syndrome, a rare form of epilepsy that begins in infancy.
Manchester-based Zeus Capital advised the main shareholders of Brabant on the deal.
Brabant’s assets include worldwide development and commercialisation rights to BrabafenTM, which has recently received orphan drug designation in Europe and the US for the treatment of Dravet syndrome. Children with Dravet syndrome, also known as Severe Myoclonic Epilepsy of Infancy (SMEI), experience frequent, severe and potentially life-threatening seizures that typically start in the first year of life. These seizures do not respond to standard anti-epileptic medications and current treatment options are very limited.
Zogenix, which is headquarterd in San Francisco is a pharmaceutical company developing and commercialising products for the treatment of pain-related and central nervous system disorders.
Dan Bate, corporate finance director at Zeus Capital, commented: “We are delighted to have been involved in this transaction. Alongside our legal advisory team at Eversheds Manchester led by Danny Hall and Nicola Brookes, we were able to provide the advice and support that enabled our clients to maximise value and to complete the disposal of Brabant quickly and efficiently.”
Roger Hawley, chief executive officer of Zogenix said: “This is a transformational acquisition for Zogenix… We believe the positive, durable long-term results of Brabafen place us in a leadership position within the Dravet syndrome community. We are fully committed to bringing this promising therapeutic to market for the benefit of these children and their families.”
In addition to the $35m acquisition cost in cash and Zogenix stock (11,995,202 shares to be registered), the terms of the purchase agreement includes $50m in potential regulatory milestone payments and up to $45m in royalty payments on Brabafen sales. The first milestone payment is not anticipated until late 2016 upon submission of the New Drug Application for Brabafen.
Zogenix is also set to provide a $20m term loan plus an additional $4m in a revolving line of credit to fund research and development.
