In a move to diversify its business, Australian biopharma CSL has agreed to acquire Vifor Pharma for $11.7 billion. The deal would give CSL—heavily dependent on vaccines and blood plasma products—Vifor’s attractive kidney disease and iron deficiency franchises.
The all-cash purchase—at $179.25 per share—represents a 40% premium on the 60-day average price of Vifor's stock as of Dec. 1, CSL said. The transaction would be the largest in the industry this year, topping the $11.5 billion Merck ponied up for Acceleron.
The price was considerably higher than anticipated. Two weeks ago, the Australian Financial Review reported that CSL was eying a potential deal for around $7.1 billion.
“(Vifor) brings an outstanding team and a leading portfolio of products across nephrology, dialysis and iron deficiency therapies and a proven partnering and business development and licensing strategy,” Paul Perreault, CEO of CSL said in a release. “Vifor Pharma will also expand our presence in the rapidly growing nephrology market, while giving us the opportunity to leverage our complementary scientific expertise.”
Adding Vifor’s pipeline will give CSL 37 products in development, a 32% increase over its existing suite of pipeline meds, the company said.
Vifor’s best-selling product, Ferinject, an iron supplement which accounts for 30% of its sales, faces generic competition between 2024 and 2026.
For its part, Vifor said its board has unanimously recommended the offer. Its largest shareholder, Patinex AG, which owns 23% of the company, has agreed to tender its shares. Vifor believes CSL’s global reach, R&D capabilities and balance sheet will allow it to bring its products to more patients, it said.
“The offer provides an excellent strategic opportunity for Vifor Pharma to optimize future market opportunities from a position of strength and to create substantial value for all stakeholders,” Jacques Theurillat, Vifor’s chairman said in a statement.
Amid rumors of the deal talks, some analysts questioned CSL’s motivation for picking up a company with little overlapping business. But analysts at Jefferies pointed to several positives.
“CSL believes that Vifor is a relatively high growth, high barrier to entry to business with few competitors—not unlike its plasma business,” Jefferies analyst David Stanton wrote in a note to clients. “CSL has a strong track record in integrating acquisitions and we think it will in this case.”
Diversification will make CSL less dependent on its blood plasma business, which struggled during the pandemic in 2020 before recovering this year.
A year ago, CSL bailed (PDF) on a University of Queensland-partnered project to develop a COVID-19 vaccine. The company also manufactures COVID shots for AstraZeneca, though the Pfizer-BioNTech vaccine has become the favored shot in Australia.
The agreement brings Vifor CEO Abbas Hussain back into the fold at CSL. He was a board member at CSL before departing in June of this year. Last week, Vifor added GSK veteran Hervé Gisserot to take over as its chief commercial officer.