Fairmount Partners Advises Metrics, Inc., In Sale to Mayne Pharma of Australia

Fairmount Partners Advises Metrics, Inc., In Sale to Mayne Pharma of Australia

4 October 2012, Melbourne Australia: Mayne Pharma Group Limited (ASX: MYX) announced that it has entered into a binding agreement to acquire Metrics, Inc. www.metricsinc.com  Metrics, a privately-owned, US-based provider of contract development services to the pharma industry that also develops and manufactures niche generic pharmaceuticals.  The total purchase price is $120 million, including $105 million at closing, and a $15 million earn-out payable for performance of Metrics though June 2013.

Metrics is a privately-owned specialty pharmaceutical company based in Greenville, North Carolina with approximately 300 employees. Metrics develops and manufactures niche generic drugs and is also a provider of contract development services to the pharma industry.

Metrics has particular expertise in formulating complex oral drug products, including highly potent and unstable compounds, controlled substances (e.g. opiates) and products with poor bioequivalence. These products are sold in the US via exclusive distribution partners or directly through its own wholesale distributor, Midlothian Laboratories. In addition to its existing products, Metrics has a pipeline of 11 niche generic drugs in various stages of development, including two that have been filed with the US Food and Drug Administration (FDA) and a further nine products to be filed by the end of FY13.

Metrics' sales and EBITDA of $51.6m and $16.1m respectively for the 12 months ended 30 June 2012[1]

Metrics is also a leading provider of contract pharmaceutical development services with a client base of more than 100 pharmaceutical customers including industry leading, blue chip companies. Metrics has a vertically integrated model offering analytical services, formulation and commercial manufacturing.

Mayne Pharma's CEO, Mr Scott Richards said "Metrics is highly complementary to Mayne Pharma's existing business in term of its products, services and the markets in which it operates. In addition to providing scale in the US market, Metrics brings additional technical capabilities and material upside from cross-selling revenue opportunities. We have known Metrics' senior management team for some time and they have a solid track record of success in the US generics industry."

Key benefits of the acquisition include:

·         it provides direct access to the world's largest pharmaceutical market, the US, which is Mayne Pharma's principal market for its development pipeline;

·         it strengthens and diversifies Mayne Pharma's revenue streams across contract services, generic and proprietary products;

·         it expands and diversifies Mayne Pharma's pipeline of new products. The combined business has 14 products in development targeting markets with sales of US$3.6 billion per annum; and

·         it is a complementary business providing significant combination opportunities through the cross-selling of Mayne Pharma's and Metrics' approved and pipeline products in the US, Australia and other international markets.

·         providing Mayne with transformational acquisition that materially enhances Mayne Pharma's scale, market access and capabilities

Mayne Pharma Group Limited (Mayne Pharma) is an Australian specialist pharmaceutical company with an intellectual property portfolio built around the optimisation and delivery of oral dosage form drugs.

Mayne Pharma has a long and successful history of developing and commercializing improved pharmaceuticals and has launched and marketed numerous products through partnerships with licensees in various countries around the world. Mayne Pharma focuses on delivering to patients improved versions of existing drugs in order to advance safety, efficacy or ease of administration.  Mayne Pharma has a significant product portfolio and pipeline, global reach through distribution partners in Australia, USA, Europe and Asia.

Fairmount Partners, a US based specialist investment bank with extensive expertise in pharmaceutical services, represented Metrics and its shareholders in its consideration of Mayne and other potential buyers.  www.fairmountpartners.com  Neal McCarthy, Managing Director of Fairmount, was responsible for managing the transaction.

[1] Metrics sales and EBITDA for FY12 are unaudited and have been adjusted upward for the restatement of certain lease expenses and a proportion of research and development expenses have been capitalized in accordance with the Mayne Pharma accounting policy.  Refer to "Acquisition of Metrics Inc." presentation for further detail at  www.maynepharma.com

 

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