Kaléo, a small drugmaker and EpiPen rival, has been acquired by Marathon Asset Management in a deal valued at $310 million. The funding is expected to fuel the company’s growth in the allergy treatment arena and beyond.
The buyout is due to close by the end of the year, and, under Marathon's ownership, Kaléo will remain headquartered in Richmond, Virginia. In addition to the $310 million upfront price, the deal features revenue-based milestones of up to about $70 million for the next two years.
Kaléo is known for its Auvi-Q epinephrine injector, which is a direct competitor to Mylan’s EpiPen and is the first and only auto-injector approved in the U.S. for use in infants and toddlers weighing between 16.5 pounds and 33 pounds.
“We plan to leverage the company’s strong portfolio of intellectual property, its leading reputation among allergists and its experienced management team, to pursue multiple avenues of growth in the coming years,” Evan Bedil, head of healthcare at Marathon, said in a statement.
Kaléo made headlines in 2017 when it got caught up in the EpiPen pricing scandal. The company had relaunched Auvi-Q in 2016 after it had been pulled off the shelves the previous year by Sanofi, which had partnered with Kaléo on the injector, due to manufacturing and dosing concerns.
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But when Kaléo announced the relaunch, the company had hiked the price to $4,500-per-two-pack, equating to a more than 700% increase that drew media attention and the ire of Congress just months after Mylan faced intense criticism for its repeated price hikes on EpiPen, which cost $600 for a two-pack.
Kaléo's pricing for its anti-opioid overdose naloxone injector (since discontinued) also caught lawmakers’ attention at the time, and Express Scripts later sued the company.