AMAG Coughs Up $700 Million for Stem Cell Company
June 29, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Waltham, Mass.-based AMAG Pharmaceuticals, Inc. announced today that it will acquire Cord Blood Registry (CBR) for $700 million.
Last year, in November, AMAG acquired Lumara Health Inc., a specialty pharmaceutical company focused on maternal health. That deal had an upfront consideration of $600 million in cash and 3,209,971 shares of AMAG common stock. An additional $350 million based on sales milestones was also part of the deal.
That deal about doubled the size of AMAG and further strengthened its maternal health focus. Lumara’s primary product is Makena (hydroxyprogesterone caproate injection), the only product approved by the U.S. Food and Drug Administration (FDA), to cut the risk of preterm birth in women who are pregnant and have had a spontaneous preterm baby before.
In this new deal, is the largest stem cell company in the world. It stores the umbilical cord blood stem cells and cord tissue samples for families in case they are of need for future medical issues by the child or a related family member. It also partners with institutions and researchers to establish FDA-regulated clinical trials. It has assisted more than 300 families in experimental medical treatments to date.
CBR was founded in 1992. It was acquired in 2012 by GTCR, a private equity firm in Chicago. At that time Geoffrey Crouse was brought on as company chief executive officer, who then recruited a senior management team, developed a digital marketing strategy, and helped refine the company’s commercial infrastructure. CBR has an 80,000 square foot laboratory located in Tucson, Ariz, but is headquartered in San Bruno, Calif.
“GTCR is proud to have supported CBR’s growth and development over the last few years,” said GTCR’s Dean Mihas, managing director in a statement. “Geoffrey and the entire CBR team have built a tremendous platform that enjoys a strong, market-leading position, an exceptional commercial infrastructure, and attractive growth prospects. We believe that the Company is well-positioned to continue its success as part of AMAG.”
Crouse will remain with the company to lead the unit.
CBR generated $126 million of pro forma revenue in 2014, with an adjusted EBIDTA of $45 million. About half of the company’s revenue is generated by storage fees.
“CBR is a strong strategic fit for our maternal health business and will advance our strategy to pursue differentiated products in growing specialty markets,” said William Heiden, chief executive officer of AMAG in a statement. “CBR is the most recognized stem cell banking brand among healthcare providers and is the top choice for families who choose to store cord blood, not only for their known clinical uses today, but also for their broader potential future utility. Moreover, CBR’s sophisticated, consumer-driven marketing capabilities offer a compelling opportunity to reach a broader population of expectant mothers who may benefit from our product offerings in the maternal health space including Makena.”
AMAG stock has been on a steady incline for the last year. Shares traded for $19.97 on July 10, 2014, rose to $32.70 on Oct. 3, 2014, and hit $60.01 on April 24, 2015. Shares are currently trading for $67.06.
The deal is being led by Goodwin Procter attorneys Stuart Cable, Joe Bernardi, Jacqueline Mercier, Grant Manning, Jennifer Bralower and James Barri.
As Rumors Swirl About GlaxoSmithKline Bid, Who Could Suitors Be?
Rumors are swirling that Swiss-based Roche and U.S.-based Johnson & Johnson are eying the U.K. company for approximately $143 billion. But Roche and J&J aren’t the only companies though who have been thought could go after the elephant that is Glaxo.
Last month there was buzz that Pfizer Inc. was considering acquiring Glaxo, a year after it failed to acquire AstraZeneca PLC . Just this month over a third of respondents in a poll conducted by BioSpace believe that AstraZeneca PLC could be in the running to acquire struggling GlaxoSmithKline (GSK).
So BioSpace wants to ask our readers again what they predict for this new dealmaking bonanza. Will Glaxo go—and if so, to whom?