Eagle Pharmaceuticals Agrees to Terms to Acquire Acacia Pharma Group plc

Eagle Pharmaceuticals, Inc. recently announced it has reached agreement on the terms of a transfer of the entire issued and to be issued share capital of Acacia Pharma Group plc to Eagle by way of a scheme of arrangement under Part 26 of the United Kingdom’s Companies Act 2006.

The terms of the proposed transaction value Acacia Pharma’s existing issued and to be issued share capital at approximately €94,700,000, or the equivalent of €0.90 per share. Each shareholder of Acacia Pharma would receive, as consideration for each share of Acacia Pharma held by such shareholder, €0.68 in cash and 0.0049 shares of common stock of Eagle. The terms of the proposed transaction also provide for Eagle to guarantee approximately €25.0 million of debt within the Acacia Pharma group. In connection with the proposed transaction, (i) the Company and Acacia Pharma entered into a co-operation agreement on March 27, 2022 and (ii) certain shareholders and directors owning shares in the capital of Acacia delivered to the company and Acacia deeds of irrevocable undertaking.

The proposed transaction has been approved by the boards of directors of both companies and is expected to close in late Q2 2022, subject to approval by Acacia Pharma’s shareholders and the sanction of the High Court of England and Wales and customary closing conditions for transactions of this type. There is no assurance that the proposed transaction will be consummated on the proposed terms or timing or at all.

The proposed transaction is expected to provide Eagle with two currently marketed, acute care, hospital products with the potential to disrupt the marketplace:

• BARHEMSYS is the first and only antiemetic approved by the FDA for rescue treatment of postoperative nausea and vomiting (PONV) despite prophylaxis. Eagle currently calls on healthcare providers and institutions representing over 70% of the expected BARHEMSYS addressable market opportunity.
• BARHEMSYS is also approved for the treatment of PONV in patients who have not received prophylaxis and for the prevention of PONV. The total estimated annual US addressable market for prophylaxis and rescue is $2.7 billion, and
• BYFAVO is indicated for the induction and maintenance of procedural sedation in adults undergoing procedures lasting 30 minutes or less, with an estimated total addressable market in procedural sedation of more than $0.4 billion per year in the U.S.

“We are delighted to announce that we have agreed to terms for the proposed acquisition of Acacia Pharma. This will be a very important acquisition for us, both financially and strategically. In recent years, the pharmaceutical industry has witnessed slower uptake of new products and longer ramp periods. In the face of further challenges brought about by the COVID-19 pandemic, many smaller underfunded companies experienced significant hurdles launching products. We therefore believe that Eagle is well suited to drive uptake of these two new products, building from Acacia Pharma’s established foundation since its launch, through our experienced and specialized hospital-based sales organization with minimal additional infrastructure,” stated Scott Tarriff, President and Chief Executive Officer of Eagle Pharmaceuticals. “We have been extremely disciplined in managing our balance sheet over the years, and we believe that the proposed acquisition is a wise use of the cash we have generated. With these two products, together with landiolol, which is on track for an NDA submission to the FDA in May of this year, Eagle will potentially have three NCEs going into their launch phase. We believe these efforts will strengthen our leadership position in the hospital and oncology space and establish a strong foundation for sustainable long-term growth and bring value to our shareholders.”

“We believe that BARHEMSYS and BYFAVO address unmet clinical needs and are nearing usage inflection points, with strong formulary acceptance, and that with our longstanding relationships in the hospital space, we can accelerate uptake and capture the commercial potential of these assets. In doing so, we strive to impact and improve the care of patients undergoing medical treatments such as surgery and invasive procedures. Additionally, their value to anesthesia providers, who are key users, is important, facilitating precision medicine for patients. We see our sales infrastructure as a strategic asset, and as we add to our commercial product portfolio going forward, we plan to expand the size of our salesforce over the next two years,” stated Michael Moran, Executive Vice President and Chief Commercial Officer of Eagle Pharmaceuticals.

Proposed Transaction Rationale

• Opportunity for Eagle’s highly skilled hospital-based salesforce to integrate and promote BYFAVO and BARHEMSYS and to leverage longstanding relationships to realize the full potential of these assets.
• Anticipated strong synergistic fit with Eagle’s current and expanding portfolio of hospital products and other expected cost synergies.
• Attractive opportunity to accelerate Eagle’s existing growth strategy and further its advantage in acute care.
• Commercial stage, NCE products with long patent duration through 2031 would add complementary and diversified revenue streams to Eagle.
• Eagle’s strong financial position enables it to invest in this opportunity for potential significant value creation.
• Compelling commercial opportunity in both FDA-approved products:
  • BARHEMSYS is the first and only antiemetic approved for rescue treatment of PONV despite prophylaxis and offers the potential for savings to hospitals and ambulatory centers.
  • BYFAVO addresses an unmet need in procedural sedation by offering a fast-acting agent with a favorable safety profile versus other current treatments.
• Expected to be earnings accretive in 2024.

BARHEMSYS (amisulpride for injection) is the first and only FDA-approved product for PONV rescue after failed prophylaxis. It is a selective dopamine D₂ /D₃ antagonist with a broad, differentiated label. PONV is a common complication of surgery, occurring in approximately 30% of all surgical patients and 80% of high-risk patients. PONV is associated with the use of anesthetic gases and opioid painkillers and is particularly common following gynecological, abdominal, breast, eye, and ear operations, especially those lasting an hour or more. PONV can delay hospital discharge; result in re-admission after in-patient procedures; and lead to day-case patients being admitted to the hospital, all of which can result in significantly increased healthcare costs.

By reducing these risks, BARHEMSYS offers the potential for significant economic savings to hospitals and ambulatory centers. Approximately 70 million invasive surgical patients receive antiemetic prophylaxis annually in the US. Approximately 10 million of these patients per year require PONV rescue treatment. BARHEMSYS is the only drug with an FDA-approved indication to treat patients who have failed PONV prophylaxis. It has an established safety profile and efficacy demonstrated in controlled clinical studies. BARHEMSYS is nonsedating, a common complaint of standard antiemetic agents. Patients experiencing PONV who were treated in a pivotal clinical trial and failed prophylaxis were treated with BARHEMSYS. These patients were observed to have shorter post-anesthesia care (PACU) and hospital stays then patients who were not. Please see Important Safety Information for BARHEMSYS, below.

BYFAVO (remimazolam for injection) is a rapid onset/offset procedural sedative with an established safety and efficacy profile. Additional benefits include predictability and a readily available reversal agent. Please see Important Safety Information, including boxed warning, below.

BYFAVO has a compelling commercial opportunity, addressing a clear unmet need. There has been no innovation in the sedation space for over 20 years. Customers seek a fast onset, titratability, and rapid recovery for quick discharge, and shorter procedure times allow for increased procedural volumes. BYFAVO has a broad label and potential health economic benefits and may enable shorter procedure times and greater patient throughput. It is indicated for procedural sedation in adults in procedures lasting 30 minutes or less and has a substantial clinical data package demonstrating efficacy and safety in colonoscopies and bronchoscopies, including the most challenging patients.

The terms of the proposed transaction value Acacia Pharma’s existing issued and to be issued share capital at approximately €94.7 million. The cash consideration payable by Eagle under the terms of the transaction would be approximately €71.6 million. The cash consideration payable by Eagle under the terms of the proposed transaction is expected to be financed by existing cash resources of Eagle. The remaining approximately €23.2 million consideration payable by Eagle is expected to be paid in shares of Eagle common stock. The terms of the proposed transaction also provide for Eagle to guarantee approximately €25.0 million of debt within the Acacia Pharma group

The Scheme is expected to become effective between the middle of May 2022 and June 30, 2022, and is subject to closing conditions including, among other things, obtaining the requisite approval of Acacia Pharma’s shareholders and the sanction of the High Court of England and Wales by June 30, 2022, which date may be extended by mutual agreement of the parties. There is no assurance that the proposed transaction will be consummated on the proposed terms or timing or at all.

Cooley (UK) LLP is acting as legal advisor and William Blair & Company, L.L.C. is acting as exclusive financial advisor to Eagle Pharmaceuticals in connection with the proposed transaction. Locust Walk served as a transaction advisor to Eagle Pharmaceuticals. NautaDutilh BV is acting as legal advisor to Eagle Pharmaceuticals in connection with Belgian law. Sullivan & Cromwell LLP is acting as legal advisor and Greenhill & Co. International LLP and Jefferies International Limited are acting as co-financial advisors to Acacia Pharma in connection with the proposed transaction. Eubelius CVBA is acting as legal advisor to Acacia Pharma in connection with Belgian law and its listing on Euronext Brussels.

Acacia Pharma is a hospital pharmaceutical company focused on the development and commercialization of new products aimed at improving the care of patients undergoing significant treatments such as surgery, other invasive procedures, or cancer chemotherapy. Acacia Pharma is a public company limited by shares, incorporated in England and is listed on the Euronext Brussels exchange under the ISIN code GB00BYWF9Y76 and ticker symbol ACPH. Acacia Pharma has its US headquarters in Indianapolis, IN, and its R&D operations are centered in Cambridge, UK.

Eagle is a fully integrated pharmaceutical company with research and development, clinical, manufacturing, and commercial expertise. Eagle is committed to developing innovative medicines that result in meaningful improvements in patients’ lives. Eagle’s commercialized products include vasopressin injection, PEMFEXY, RYANODEX, BENDEKA, BELRAPZO, TREAKISYM (Japan), and its oncology and CNS/metabolic critical care pipeline includes product candidates with the potential to address underserved therapeutic areas across multiple disease states. For more information, visit www.eagleus.com.