- Eagle Pharmaceuticals has agreed to snatch up early-stage biotech Arsia Therapeutics, launching it into the biosimilar space.
- The Woodcliff Lake, N.J.-based drugmaker plans to shell out $30 million upfront in cash and Eagle common stock and offer an additional $48 million in milestone payments, according to a Nov. 11 statement.
- The deal gives the acquirer access to Arsia's technology platform, which works to decrease the viscosity of proteins in drug products. Lower viscosity means the product takes up less space, enabling more active ingredient to be included in each dose – allowing for different means of administration like subcutaneous injection.
Eagle has been looking to expand its portfolio, and biosimilars seem like a smart investment. One of many reports backing that assumption, a Markets and Markets analysis released in July projected the biosimilar space will have a 22.1% compound annual growth until 2020, at which point it will be valued at $6.22 billion.
Already, big players across the industry are pouring funding into biosimilar platforms. Amgen, for instance, plans to invest more than $1 billion in its portfolio, while Novartis is investing the same amount in biosimilar manufacturing facilities alone.
Eagle believes its newest acquisition will give the company a leg up on that competition, allowing it to create "biobetters," or biosimilars that outperform the drug they're based on.
"While large pharmaceutical companies around the world invest heavily in biosimilars, Eagle’s and Arsia’s combined know-how and execution capabilities will allow us to improve upon those formulations to create biobetters, which we believe will be key to product differentiation, pricing power and larger market share," Eagle CEO Scott Tarriff said in the Friday statement.
In any event, a foray into biosimilars is likely to keep investors interested in Eagle. The acquisition also could further some analysts' claims that the company might find itself a takeover target given its small-cap size and a recent uptick in healthcare M&A.
Eagle reported $59.3 million in cash and cash equivalents as of Sept. 30.
Its stock has fallen about 2.5% since market closing on Nov. 11. However, the company's current $77.54 per share price is almost a complete rebound to price it traded at last November. An FDA complete response letter for the biopharma's drug Kangio hit it stock hard in March.