Richmond pharmaceutical company Kaleo has acquired
Marathon Asset Management to acquire a company by the end of the year
November 29, 2021
New York-based Marathon Asset Management LP announced on Monday that it has entered into a definitive agreement to acquire Richmond-based private pharmaceutical company Kaleo Inc., known for making injectors to treat allergic anaphylaxis and drug overdoses. opioids.
The total base purchase price is approximately $ 310 million in cash, less some adjustments, and includes potential milestone payments based on net revenues of up to approximately $ 70 million in cash for fiscal years 2022 and 2023, as part of a transaction that will provide liquidity to Kaléo shareholders. on closing, according to a press release from Marathon.
“Kaleo’s sales trajectory has been impressive and we view the company as a platform for growth,” said Dr. Evan Bedil, head of healthcare for Marathon, in a statement. “We plan to leverage the company’s strong intellectual property portfolio, its reputation as a leader among allergists and its experienced management team to pursue multiple growth avenues over the next several years. “
The company’s head office will remain in Richmond.
In addition, Tredegar Corp., a Richmond-based manufacturer of plastic films and aluminum extrusions, is selling its 18% stake in Kaleo, which represents approximately 3.3 million shares, the company said on Monday. Tredegar is a 1989 spin-off of Ethyl Crop., Which now operates as NewMarket Corp.
Twin brothers Dr Eric Edwards and Evan Edwards founded Kaleo in 2005 and left it in 2019. Eric Edwards co-founded Phlow Corp., another Richmond-based company that is developing new ways to make essential medicines.
Phlow plans to open a $ 125 million factory in Petersburg. In May 2020, Phlow won a four-year, $ 354 million federal contract from the US Biomedical Advanced Research and Development Authority (BARDA) to produce essential drugs using advanced manufacturing processes from the Medicines for All Institute based at Virginia Commonwealth University’s College of Engineering.
Kaleo, which holds more than 200 issued patents, has developed the patented Aerio Auto-Injection platform for the treatment of allergic anaphylaxis and opioid overdoses. He also developed Evzio, a prescription drug used to treat opioid-related emergencies like overdoses, which he has since discontinued. The company has marketed the epinephrine injector AUVI-Q, which dispenses doses of 0.15 mg and 0.3 mg, and AUVI-q, which injects 0.1 mg of epinephrine and is designed for infants and toddlers.
In 2020, Kaleo began offering its auto-injector under the Allerject name in Canada.
“The Kaleo management team looks forward to partnering with Marathon, which has been a strong ally of Kaleo as a lender for many years,” said Ronald Gunn, Chairman and CEO of Kaleo, in a statement. . “With its vast resources and well-established capital base, we have found the strongest possible partner to help us commercialize our important intellectual property and write the next chapter in Kaleo’s history. “
The board of directors and shareholders of Kaléo have unanimously approved the transaction, which should be finalized by December 31 at the latest.
Formed in 1998, Marathon Asset Management manages $ 23 billion in assets. His healthcare team buys pharmaceutical royalties in addition to providing capital.
Pursuant to a settlement agreement, Kaleo was ordered by the US Department of Justice to pay $ 12.7 million to resolve a lawsuit filed under the False Claims Act, alleging that the company “submitted or caused the submission of bogus claims for Medicare… for Ezvio, ”by pharmacies.
The company gained national attention when Evzio’s price jumped. In the fall of 2020, Kaleo ditched Evzio and its generic counterpart.