Covis Buys US Biotech Amag Pharmaceuticals
Specialty pharma company Covis has agreed to buy US-based Amag Pharmaceuticals, boosting its portfolio of therapies for life-threatening conditions and chronic illnesses.
Covis, owned by private equity group Apollo Global Management, will pay about $647 million on an enterprise basis, including debt obligations that are expected to be assumed or repaid net of cash. The boards of directors at both companies have unanimously approved the merger, which is expected to close in November, pending antitrust approval and customary conditions.
Michael Porter, Covis CEO, said that Amag’s category leading treatments are “strong strategic complements to our existing therapeutic portfolio.” Covis, which has brands in the areas of respiratory and allergy, cardiovascular, and gastroenterology and the central nervous system, gains Amag’s Feraheme, indicated for treating iron deficiency anemia in adults. Amag is also developing anticoagulant reversal agent Ciraparantag, which the US Food and Drug Administration (FDA) has granted Fast Track designation.
Amag had been previously pressured to improve its performance by activist investor Caligan Partners, which had accused the Waltham, Massachusetts-based biopharma of “poor decisions and lax oversight.” The parties reached agreement in October 2019.
The takeover by Covis represents “the most compelling opportunity for shareholders”, said Amag. It follows earlier efforts by the firm to streamline and strengthen its core business, including selling its women’s health assets.
In January, then president and CEO of Amag, William Heiden, said that although the company continued to believe in its women’s therapies Intrarosa and Vyleesi, soft fourth-quarter results and uncertainty around the long-term durability of Makena – a treatment to prevent preterm birth – made it challenging to invest in both its pipeline and the marketing efforts required for the two drugs.
In May, Amag sold its rights to menopausal drug Intrarosa to Millicent Pharma and in July terminated its license agreement with Palatin Technologies for Vyleesi, a treatment for premenopausal women with acquired, generalized hypoactive sexual desire disorder (HSDD).
On Oct. 5, the US biopharma also disclosed that it had received a notice from the FDA proposing to withdraw approval of Makena because the required post-market study failed to verify clinical benefits and evidence did not show the drug was effective for its approved use.
Author: Elaine Burridge, Freelance Journalist
