Xanodyne Pharmaceuticals, backed by MPM Capital-led syndicate, approved to acquire pain management portfolio
18 July 2005
Xanodyne Pharmaceuticals, Inc., a specialty pharmaceutical
company focusing on innovative products in the therapeutic areas of
women's health and pain management, today announced that the
Bankruptcy Court for the District of Delaware has approved its bid
to acquire the pharmaceutical assets of aaiPharma (PINK SHEET:
AAIIQ). The deal terms included $209.25 million cash and additional
non-cash consideration.
Xanodyne, a private company financed by an
equity syndicate led by MPM Capital, and co-led by Apax Partners,
headquartered in Greater Cincinnati, is dedicated to providing
patient care in women's health and pain management.
Other new investors included Perseus-Soros BioPharmaceutical
Fund and affiliates of AIG Global Investment Group, while Silver
Point Finance provided Xanodyne a term debt and revolver facility.
The new investors were also joined in the financing by existing
investors, Healthcare Ventures, Essex Woodlands, Blue Chip Venture
Company and Coleman Swenson Hoffman Booth. Xanodyne was a logical
buyer of the aaiPharma portfolio and through this acquisition is
strengthening its offering of high quality, effective pain
management pharmaceuticals to physicians and their patients.
This acquisition will bring a number of currently marketed pain
management agents into the Xanodyne portfolio, including Darvon(R)
and Darvocet(R), two drugs with a strong heritage in pain
management. The purchase also includes three pain products that are
presently in clinical development and one other early-stage
development product. The combined business will have pro-forma 2005
revenues of approximately $100 million, and will create a new force
in the specialty pharmaceuticals sector.
"We have believed for some time that the two businesses fit very
well together," said William Nuerge, chief executive officer of
Xanodyne.
"Xanodyne brings a pipeline of women's healthcare products and a
strong commercial capability and infrastructure for both women's
healthcare and pain management products, while aaiPharma has a
broad range of currently marketed and pipeline pain products. With
this acquisition, Xanodyne has a comprehensive portfolio of pain
management and women's health products, including six key
development compounds - three in each of its main therapeutic areas
of focus - as well as the ability to develop and commercialize its
assets. I am not aware of any evolving specialty pharmaceutical
company with the combination of people, products, performance,
pipeline and potential that we now have at Xanodyne."
According to Steven St. Peter, M.D., general partner, MPM
Capital, "The portfolio includes some of the most widely prescribed
pain products and a growing business in women's health. The
products in development are very synergistic, and this management
team knows exactly how to launch and position these
products."
"For MPM, this deal represents an important
dimension of our investment strategy," said Ansbert Gadicke, M.D.,
general partner, MPM Capital. "We are actively looking to identify
diversely held assets that can be combined with a commercial
product portfolio and a development pipeline to create robust cash
flow and fund future product development."
"Xanodyne's strong management team and employee base, new
products pipeline, commercial capabilities, and strong performance
were very attractive to us," said Adele Oliva, partner, Apax
Partners, L.P. "Our organization, as well as the entire investor
group, has great confidence in Xanodyne's ability to be a major
player in pain management and women's healthcare and achieve its
vision of growth."
"We are delighted to be joined by a superb
new investment syndicate as Xanodyne's management team continues
towards its objective of becoming a leading pain management and
women's health care products company. It was very important
to identify an equity sponsor capable of understanding the
development-stage assets, growth potential of the products,
complexity of the situation, and having the financial scale to
complete the transaction," said James H. Cavanaugh, Ph.D., chairman
of Xanodyne.
Nuerge added, "A significant feature of the transaction will be
an on-going relationship between Xanodyne and aaiPharma Development
Services, and we hope to be one of aaiPharma Development Services'
preferred customers.
We are committed to using their cutting edge technology and
top-notch development services to complete our current pipeline and
further extend it."
Ludo Reynders, Ph.D., chief executive officer of aaiPharma Inc.,
re-enforced that point, "By letting Xanodyne focus on their
commercial expertise, aaiPharma is freed to focus on its strengths
in product development.
The relationship is very symbiotic by
design."
A new Board of Directors has been established to guide the
organization. James Cavanaugh, Ph.D. (Healthcare Ventures), James
Currie (Essex Woodlands), and William Nuerge (Xanodyne CEO) remain
on the Board and will be joined by Ansbert Gadicke, M.D. (MPM),
Steven St. Peter, M.D. (MPM), Adele Oliva (Apax Partners) and
Dennis Purcell (Perseus-Soros). Cavanaugh continues as chairman of
the board.
Xanodyne was advised by Bear, Stearns & Co., Inc. and
Dinsmore & Shohl LLP; the equity sponsors were advised by
Lazard and Weil, Gotshal & Manges (bankruptcy counsel) and
Palmer & Dodge (corporate counsel).
About Xanodyne
Xanodyne Pharmaceuticals, Inc. is a
privately owned, fully integrated, branded specialty pharmaceutical
company focusing on innovative products in the therapeutic areas of
women's health and pain management. The company, located in the
greater Cincinnati area, has a nationwide sales force and currently
markets numerous pharmaceutical products. More information
regarding Xanodyne can be accessed at http://www.xanodyne.com/.
About MPM
MPM Capital L.P. is a global investment management firm focused
solely on life sciences investing. One of the largest investment
management firms dedicated to the life sciences sector, MPM Capital
has offices in Boston and San Francisco. MPM's portfolio ranges
from start-ups to large capitalization public companies, with a
primary focus on biopharmaceutical and medical device companies
nearing commercialization of products or those companies that
already offer product-driven opportunities. The firm manages over
$2.1 billion in assets through the MPM BioVentures Family of
venture capital funds and the MPM BioEquities public market funds.
More information on MPM can be found at http://www.mpmcapital.com/.
About Apax Partners
Apax Partners is one of the world's leading private equity
investment groups, operating across the United States, Europe and
Israel. Apax Partners has raised or advised approximately $20
billion around the world. With more than 30 years of direct
investing experience, Apax Partners' Funds provide long-term equity
financing to build and strengthen world-class companies. It pursues
a multi-stage equity investment strategy, investing in late
venture, growth capital and buyouts. Apax Partners' Funds invest in
companies across its 6 chosen global sectors of telecommunications,
IT, retail and consumer, media, healthcare and financial/business
services. For additional information refer to http://www.apax.com/ or contact Laura
Brightsen, Director Marketing, 212-419-2461.
For further information
contact:
Xanodyne Contact
Susan McDonald of Justice & Young Public Relations
T: +1 513 388 4700 ext. 3014
E: smcdonald@jypublicrelations.com
Syndicate Contact
Shari Annes of MPM Capital
T: +1 650 888 0902
E: sannes@mpmcapital.com