Questcor buys CMO that makes API for Acthar
The Anaheim, CA, company said today that it would pay shareholders of BioVectra about $50 million upfront and up to another $50 million depending on the CMO's performance. The deal is slated to close this month.
BioVectra, based on Prince Edward Island, Canada, manufactures active pharmaceutical ingredients (APIs), chemical intermediates and bioprocessing reagents in a plant that employs 180. The company's website says it has a 33,500-square-foot API plant, a biochemical center with 20,000 square feet of manufacturing space and a bioextraction facility. The company had sales of about $28 million for its fiscal year that ended Aug. 31, a year-over-year improvement of 15%.
Questcor says BioVectra will keep its management team, remain in Canada and operate independently. It says it will "support the continued growth of BioVectra's business." It acknowledges, however, that it has no experience in contract manufacturing and making the acquisition beneficial to its own shareholders will depend on it being able to grow that business. Questcor CEO Don M. Bailey said the deal "puts us in a better position to meet the continuing growth in demand for Acthar, brings to our company a broader depth of technical and scientific expertise, and provides us with a platform for potential international expansion."
In September, Questcor said that Medicaid rebate changes could boost sales of its Acthar drug almost $100 million in the next year. The next day, however, it was reported that Aetna decided it would cover the cost of Acthar only for West syndrome, which causes infantile spasms, but not its other uses, including indications in multiple sclerosis and nephrotic syndrome. The insurer said the gel hasn't been proven to work better than existing treatments, or hasn't proven effective at all. Questcor said today that it is looking at seeking FDA approval for some other indications.
- here's the release