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Novartis to acquire Fougera for $1.53 billion

Wednesday, May 02 2012 | Comments
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Novartis AG signed a definitive agreement to acquire Fougera Pharmaceuticals Inc., a specialty dermatology generics company based in Melville, N.Y., for approximately $1.53 billion in cash.

The acquisition will make Sandoz, Novartis' generic drugs division, the leading generic dermatology drug company in the United States and worldwide, Novartis said. According to data from IMS Health Inc. cited by Novartis, the combined company will have estimated annual global sales of nearly $620 million, primarily in the U.S. market.

Fougera had net sales of $429 million in 2011. The firm has two primary divisions in the United States, both of which are focused on specialty pharmaceuticals in dermatology: the Fougera division and the PharmaDerm division. The Fougera division is the company's generic drug business, with 45 marketed products, while the PharmaDerm division focuses on branded specialty pharmaceuticals, with a total of 17 brands.

Novartis noted that Fougera offers "strong dermatology development and manufacturing expertise, with numerous launches planned for 2012 and beyond."

According to Jeff George, global head of Sandoz, Fougera has "valuable technical capabilities" in the area of topical dermatological products, especially in the development and manufacturing of semisolid forms, such as creams and ointments.

Don DeGolyer, president of Sandoz's U.S. business, noted that Fougera and Sandoz serve many of the same customers in the United States, which should lead to "significant sales and cost synergies."

At the same time, Sandoz will use its position in the United States and around the world to expand Fougera's sales base.

The transaction is subject to certain regulatory approvals, but is expected to be completed in the second half of this year. It is expected to be accretive to core earnings per share and will be financed with existing cash resources and cash flow.

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