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Pittsburgh’s Milan Inc. to buy growing Bioniche Pharma for $550M

Generic and specialty drugmaker Milan Inc. (NYSE: MYL) has agreed to buy injectable drug company Bioniche Pharma Holdings Ltd. for $550 million in cash, gaining the Pittsburgh, Pennsylvania’s Milan entrance to the North American injectables market. Bioniche Pharma is a global specialty sterile injectable pharmaceutical company based in Galway, Ireland with a majority of its […]

Generic and specialty drugmaker Milan Inc. (NYSE: MYL) has agreed to buy injectable drug company Bioniche Pharma Holdings Ltd. for $550 million in cash, gaining the Pittsburgh, Pennsylvania’s Milan entrance to the North American injectables market.

Bioniche Pharma is a global specialty sterile injectable pharmaceutical company based in Galway, Ireland with a majority of its sales in the United States, according to a release by RoundTable Healthcare Partners, an operations-minded private equity firm in Lake Forrest, Illinois. RoundTable bought a majority interest in Bioniche Pharma for $18.5 million in 2006.

Since then, Bioniche Pharma’s revenue have grown six times. “Bioniche Pharma’s exceptional management team and dedicated employees have driven the company to become a leading, generic and specialty injectable pharmaceutical company,” said Jack McGinley, a founding partner of RoundTable and chairman of the Bioniche Pharma board.

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Mylan expects the injectables business to add to its earnings in the first year after acquisition and to be a growth platform for both its drug and biologics businesses. “We are extremely pleased to be adding this complementary, high-growth, high-margin business to our one-of-a-kind global pharmaceutical platform,” said Robert J. Coury, chairman and CEO of Mylan, in his company’s release on the deal.

“Bioniche Pharma has maintained a long-held strategy of focusing on quality injectable products with limited competition, and difficult-to-develop and manufacture compositions,” Coury said. “With this one transaction, we will have acquired the necessary critical mass to compete in the attractive U.S. injectables market, as well as the ability to even further leverage this business throughout the rest of our global commercial platform.”

Bioniche Pharma has 30 products for hospitals, including analgesics and anesthetics, as well as orthopedic, oncology and urology therapies. The Irish company has invested in its pipeline, which includes 15 Abbreviated New Drug Applications that are pending approval at the Food and Drug Administration and more than 25 products in development.

Mylan plans to combine Bioniche Pharma with its unit-dose business UDL Laboratories to form “Mylan Institutional,” a new hospital and institutional business of the company’s generics segment in North America. This business will serve group purchasing organizations, wholesalers, hospitals, surgical and radiology services, home infusion and retail areas with a differentiated and tailored product offering, Mylan said.

Mylan is paying a hefty price for Bioniche Pharma, which had $130 million in net revenue for the 12 months ended May 31. However, the Irish company’s revenue growth could be quickening. It collected $43.5 million 0f that net revenue, or about one-third, in the last three months of that period, according to Mylan.

But Mylan is not assuming Bioniche Pharma’s debt or acquiring that company’s cash as part of its transaction.

The Pittsburgh company’s shareholders gave an initial thumbs up to the deal, pushing up Mylan’s shares by 2.6 percent to $18.32 Thursday, the first full day after the announcement. Mylan shares were down more than 3 percent to $17.70 at noontime Friday, a likely reflection of overall market declines fed by weak bank earnings and pessimism of consumers.