BRUSSELS and CAMBRIDGE, Massachusetts, Oct. 10, 2019 /PRNewswire/ --
Regulated Information – Inside Information –
UCB and Ra Pharmaceuticals Inc. (NASDAQ: RARX, Ra Pharma)
announced today their entry into a merger agreement pursuant for
which UCB will acquire Ra Pharma. Under the terms of the agreement,
Ra Pharma shareholders will receive US$
48 in cash for each Ra Pharma share at closing. The Boards
of Directors of both companies have unanimously approved the
transaction, which remains subject to approval by Ra Pharma
shareholders and to obtaining antitrust clearance and other
customary closing conditions.
Ra Pharma is a clinical-stage biopharmaceutical company
leveraging a proprietary peptide chemistry platform to develop
novel therapeutics for the treatment of serious diseases caused by
excessive or uncontrolled activation of the complement system, a
critical component of the innate immune system. The company was
founded in 2008 and is headquartered in Cambridge, MA, U.S. The company's
ExtremeDiversity™ platform enables the production of
synthetic macrocyclic peptides combining the diversity and
specificity of antibodies with the pharmacological properties of
small molecules.
Ra Pharma's phase 3 product candidate, zilucoplan, is a
once-daily self-administered, subcutaneous peptide inhibitor of C5.
In December 2018, Ra Pharma announced
positive top-line results from a phase 2 trial of zilucoplan
in patients with generalized myasthenia gravis (gMG), achieving
clinically meaningful and statistically significant reductions in
both primary and key secondary endpoints. Zilucoplan is
currently being tested in phase 3 for the treatment of gMG with
top-line results expected in early 2021. Further indications that
are potentially addressable by zilucoplan include
immune-mediated necrotizing myopathy (IMNM), amyotrophic lateral
sclerosis (ALS) and other tissue-based complement-mediated
disorders with high unmet medical need. Ra Pharma is also
developing an extended release formulation of zilucoplan, as
well as a potential first-in-class oral small molecule C5
inhibitor.
Jean-Christophe Tellier, CEO UCB,
said: "Ra Pharma is an excellent strategic fit addressing multiple
areas of UCB's patient value growth strategy. Upon closing, the
acquisition will add to our strong internal growth opportunities –
six potential product launches in the next five years,
strengthening our neurology and immunology franchises with late and
early-stage pipeline projects. In addition, the combination will
provide us with the opportunity to become a leader in treating
people living with myasthenia gravis, an auto-antibody mediated
neurological orphan disease with high unmet medical need, as well
as adding a highly productive technology platform to our innovation
engine."
Strategic Rationale
The proposed acquisition is part of UCB's strategic growth
path, namely the "Accelerate and Expand" phase since
January 2019. The addition of Ra
Pharma's 'pipeline in a product' investigational peptide C5
inhibitor zilucoplan alongside UCB's anti-FcRn
rozanolixizumab, could create an opportunity to provide more
people living with myasthenia gravis with better treatment options.
Beyond myasthenia gravis, this acquisition has the potential to
enable UCB to offer new treatment opportunities for several rare
diseases in neurology and immunology as well as different delivery
forms, including extended release and orally available product. The
combined portfolio may also offer synergies in the outreach to
people with rare diseases and the health care market.
Additionally, UCB would gain access to a proprietary technology
platform to produce synthetic macrocyclic peptides. The platform,
known as ExtremeDiversity™, is based on messenger
ribonucleic acid (mRNA) display and combines the diversity,
specificity and high affinity of therapeutic antibodies with the
attractive pharmacological properties of small molecules. It has
the potential to augment UCB's drug discovery capabilities and
provide access to Ra Pharma's proven expertise and talent in this
area. UCB will also further strengthen its presence in the U.S., in
particular the innovation hub in the Boston, Massachusetts area (U.S.).
Doug Treco, Ph.D., President and
Chief Executive Officer of Ra Pharmaceuticals, commented: "UCB
shares our commitment to the rare disease patient community and our
goal of developing novel, accessible, and cost-effective therapies
in the areas of immunology and neurology. I firmly believe it is
the right partner for us to advance new treatment options from our
unique early and late stage pipeline to patients. Ra Pharma's
technology platform is an ideal addition to UCB's leading
innovation capabilities, and our scientists are looking forward to
working with the entire team at UCB."
Transaction Terms, Approvals and Timing to Close
Upon closing, Ra Pharma shareholders will receive US$48.00 in cash for each Ra Pharma share
(approximately US$2.5bn/€2.2bn),
which represents a transaction value of approximately US$ 2.1 billion / €2.0 billion, net of Ra Pharma
cash. The cash consideration represents an approximately 93%
premium to Ra Pharma shareholders based on the 30-day volume
weighted average closing stock price of Ra Pharma prior to signing.
The transaction has been unanimously approved by the Boards of
Directors of both, UCB and Ra Pharma and remains subject to
approval by Ra Pharma shareholders, obtaining anti-trust clearance
and other customary closing conditions. UCB and Ra Pharma expect to
complete the transaction by the end of Q1 2020.
Funding
The acquisition of Ra Pharma will be financed by a combination
of existing cash resources and new bank term loans, arranged and
underwritten by BNP Paribas Fortis and Bank of America Merrill
Lynch. Pro-forma for this acquisition, UCB's new net debt / rEBITDA
ratio would be in the range between 1.5 and 2.0 times with rapid
de-leveraging expected allowing UCB to maintain significant balance
sheet flexibility.
Financial Guidance
This acquisition will not impact UCB's 2019 financial guidance.
The acquisition would be dilutive to UCB's mid-term earnings level
due to R&D investments. As a result, the mid-term target of UCB
reaching a rEBITDA ratio (to revenue) of 31% would move to 2022
from 2021 as previously guided. The acquisition is expected to be
core EPS accretive from 2024 onwards and would enable accelerated
top and bottom line growth for UCB from 2024 onwards.
Advisors
Bank of America Merrill Lynch and Lazard are acting as financial
advisors to UCB in relation to the transaction. Covington &
Burling LLP is acting as legal advisor to UCB on this
transaction.
Centerview Partners is acting as exclusive financial advisor to
Ra Pharma on this transaction. Latham & Watkins LLP is acting
as legal advisor to Ra Pharma on this transaction.
Conference call
Today, at 9:00am (EDT) /
2:00pm (BST) / 15:00 (CEST), UCB will
host a conference call for the financial community. The login
details can also be found on: https://www.ucb.com/investors/.
US: +1-6467224916; UK: +442071943759; Belgium: +3224035816; France: +33 172727403
PIN: 20542874#
About Generalized Myasthenia Gravis (gMG)
Generalized myasthenia gravis is an unpredictable, chronic
auto-immune condition in which auto-antibodies attack specific
proteins in the neuro-muscular junction. This disrupts the way that
nerves can communicate with muscles, resulting in muscle weakness
and fatigue. Both men and women are impacted equally, and it can
occur at any age and in any race. Myasthenia Gravis is a rare
disease impacting almost 200,000 patients in the US, EU and
Japan (Gilhus N, N Engl J Med
2016;375:2570-812015). Those living with gMG can experience a
variety of symptoms, including drooping eyelids and double vision
as well as severe muscular weakness that can result in life
threatening weakness of muscles of respiration.
About Immune-Mediated Necrotizing Myopathy (IMNM)
Immune-mediated necrotizing myopathy (IMNM) is a rare, serious,
progressive neurological condition marked by severe proximal (for
example hip and shoulder) muscle weakness. Auto-immune myopathies
have a prevalence of around 15 cases per 100,000 with IMNM about
10-15% of all IMM cases. This suggests that there are more than
6,000 patients in each of the US and EU. (Anquetil et al.
Autoimmunity Reviews 18 (2019) 223–230) IMNM is only recently
understood to be a distinct entity within the broad group of
idiopathic inflammatory myopathies and as of yet there are no
approved therapies.
Amyotrophic Lateral Sclerosis (ALS) is a rare and
progressive degenerative disease of the motor neurons affecting
more than 200,000 people globally (30,000 in the US alone) in the
central nervous system (brain and spinal cord) involved in muscle
movement, leading to muscle weakness and ultimately paralysis. For
more information, please visit www.ALS.org
Zilucoplan is a macrocyclic peptide designed to
bind complement C5 with sub-nanomolar affinity and allosterically
inhibit its cleavage into C5a and C5b upon activation of the
classical, alternative, or lectin pathways and block the membrane
attack complex (MAC) assembly. Zilucoplan is in clinical
development at Ra Pharmaceuticals and is not approved in any region
of the world. In addition to a recently-initiated phase 3 study in
gMG and an upcoming phase 2 study in IMNM, zilucoplan was
selected as one of the first drugs to be tested in a multi-center
ALS platform study sponsored by the Sean M. Healey & AMG Center
for ALS at Mass General.
About Ra Pharmaceuticals Inc.
Ra Pharma is a clinical-stage biopharmaceutical company focused
on leading the field of complement biology to bring innovative and
accessible therapies to patients with rare diseases. Ra Pharma
discovers and develops peptides and small molecules to target key
components of the complement cascade. For more information, please
visit: www.RaPharma.com.
About UCB
UCB, Brussels, Belgium
(www.ucb.com) is a global biopharmaceutical company focused on the
discovery and development of innovative medicines and solutions to
transform the lives of people living with severe diseases of the
immune system or of the central nervous system. With more than 7
500 people in approximately 40 countries, UCB generated revenue of
€ 4.6 billion in 2018. UCB is listed on Euronext Brussels (symbol:
UCB). Follow us on Twitter: @UCB_news
Forward looking statements UCB
This press release contains forward-looking statements based on
current plans, estimates and beliefs of management. All statements,
other than statements of historical fact, are statements that could
be deemed forward-looking statements, including estimates of
revenues, operating margins, capital expenditures, cash, other
financial information, expected legal, political, regulatory or
clinical results and other such estimates and results. By their
nature, such forward-looking statements are not guarantees of
future performance and are subject to risks, uncertainties and
assumptions which could cause actual results to differ materially
from those that may be implied by such forward-looking statements
contained in this press release. Important factors that could
result in such differences include: changes in general economic,
business and competitive conditions, the inability to obtain
necessary regulatory approvals or to obtain them on acceptable
terms, costs associated with research and development, changes in
the prospects for products in the pipeline or under development by
UCB, effects of future judicial decisions or governmental
investigations, product liability claims, challenges to patent
protection for products or product candidates, changes in laws or
regulations, exchange rate fluctuations, changes or uncertainties
in tax laws or the administration of such laws and hiring and
retention of its employees.
Additionally, information contained in this document shall not
constitute an offer to sell or the solicitation of an offer to buy
any securities, nor shall there be any offer, solicitation or sale
of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to the registration or
qualification under the securities laws of such jurisdiction. UCB
is providing this information as of the date of this document and
expressly disclaims any duty to update any information contained in
this press release, either to confirm the actual results or to
report a change in its expectations.
There is no guarantee that new product candidates in the
pipeline will progress to product approval or that new indications
for existing products will be developed and approved. Products or
potential products which are the subject of partnerships, joint
ventures or licensing collaborations may be subject to differences
between the partners. Also, UCB or others could discover safety,
side effects or manufacturing problems with its products after they
are marketed.
Moreover, sales may be impacted by international and domestic
trends toward managed care and health care cost containment and the
reimbursement policies imposed by third-party payers as well as
legislation affecting biopharmaceutical pricing and
reimbursement.
Forward-Looking Statements of Ra Pharmaceuticals
Certain statements contained in this press release may be
considered forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including without
limitation statements regarding the merger and the ability to
consummate the merger. These forward-looking statements generally
include statements that are predictive in nature and depend upon or
refer to future events or conditions, and include words such as
"believes," "plans," "anticipates," "projects," "estimates,"
"expects," "intends," "strategy," "future," "opportunity," "may,"
"will," "should," "could," "potential," or similar expressions.
Statements that are not historical facts are forward-looking
statements. Forward-looking statements are based on current beliefs
and assumptions that are subject to risks and uncertainties.
Forward-looking statements speak only as of the date they are made,
and Ra Pharma undertakes no obligation to update any of them
publicly in light of new information or future events. Actual
results could differ materially from those contained in any
forward-looking statement as a result of various factors,
including, without limitation: (1) Ra Pharma may be unable to
obtain shareholder approval as required for the merger; (2)
conditions to the closing of the merger may not be satisfied and
required regulatory approvals may not be obtained; (3) the merger
may involve unexpected costs, liabilities or delays; (4) Ra
Pharma's business may suffer as a result of uncertainty surrounding
the merger; (5) the outcome of any legal proceedings that may arise
related to the merger; (6) Ra Pharma may be adversely affected by
other economic, business, and/or competitive factors; (7) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement; and (8) the
ability to recognize benefits of the merger; (9) risks that the
merger disrupts current plans and operations and the potential
difficulties in employee retention as a result of the merger; and
(10) other risks to consummation of the merger, including the risk
that the merger will not be consummated within the expected time
period or at all. If the merger is consummated, Ra Pharma
shareholders will cease to have any equity interest in Ra Pharma
and will have no right to participate in its earnings and future
growth. Additional factors that may affect the future results of Ra
Pharma are set forth in its filings with the SEC, including its
Annual Report on Form 10-K for the year ended December 31, 2018, which is available on the
SEC's website at www.sec.gov. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date thereof.
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