Akorn Acquires Three Branded Ophthalmic Products

Akorn, Inc. recently announced it has acquired from Merck, the US rights to three branded ophthalmic products, including those product rights obtained through the acquisition of Inspire Pharmaceuticals, Inc., a subsidiary of Merck, for $52.8 million in cash. Products included in this transaction are AzaSite, COSOPT, and COSOPT PF. In addition, Akorn has signed a 2-year supply agreement with Merck as well as a transition services agreement with customary terms. Akorn plans to ship COSOPT and COSOPT PF immediately upon close and expects to begin shipping AzaSite in the first quarter of 2014.

“We are excited to announce this transaction, which will further expand Akorn’s position as a leader in US ophthalmology products,” said Raj Rai, CEO, Akorn. “The addition of these branded products to Akorn’s portfolio strengthens our business and leverages our existing ophthalmic sales force and physician relationships.”

“The decision to divest a portion of our ophthalmics business in the US is part of our ongoing strategy to sharpen our commercial focus and improve our operational effectiveness,” said Jay Galeota, President, Hospital and Specialty Care at Merck. “This transaction provides products that complement Akorn’s portfolio and is designed to ensure continued access for physicians and patients to these medicines in the US.”

The addition of these branded products to Akorn’s ophthalmic portfolio is expected to elevate Akorn’s reputation with prescribers and leverage Akorn’s existing ophthalmic sales force and physician relationships. This strategic acquisition is also expected to provide a platform to support future acquisitions and in-licensing of branded ophthalmic products. This transaction is expected to add approximately $34 million to $38 million in revenues and approximately $0.09 to $0.11 of non-GAAP adjusted net income per diluted share in 2014.

AzaSite (azithromycin ophthalmic solution) 1% is a prescription sterile eye drop solution used to treat bacterial conjunctivitis, an infection of the eye caused by susceptible isolates of the following microorganisms: CDC coryneform group G1, Haemophilus influenza, Staphylococcus aureus, Streptococcus mitis group, and Streptococcus pneumonia. AzaSite is protected by four patents that were recently upheld by the district court of New Jersey. Although an appeal has been filed with the Federal Circuit, generic entry is currently barred until the patent expiration in 2019.

COSOPT (dorzolamide hydrochloride and timolol maleate ophthalmic solution) is a prescription sterile eye drop solution that is used to lower the pressure in the eye (intraocular pressure) in people with open-angle glaucoma or ocular hypertension, when their eye pressure is too high and beta-adrenergic blocker medicines alone have not adequately lowered the pressure. COSOPT PF (dorzolamide hydrochloride – timolol maleate ophthalmic solution) 2%/0.5% is a preservative-free prescription sterile eye drop solution that is supplied in sterile, single-use containers. COSOPT PF is used to lower the pressure in the eye (intraocular pressure) in people with open-angle glaucoma or ocular hypertension, when their eye pressure is too high and beta-adrenergic blocker medicines alone have not adequately lowered the pressure. COSOPT PF is protected by New Product Exclusivity, which provides a barrier to generic entry until 2015.

Akorn, Inc. is a niche pharmaceutical company engaged in the development, manufacture and marketing of multisource and branded pharmaceuticals. Akorn has manufacturing facilities located in Decatur, IL, Somerset, NJ, and Paonta Sahib, India, where the company manufactures ophthalmic and injectable pharmaceuticals. For more information, visit www.akorn.com.