(By Balaseshan) Questcor Pharmaceuticals Inc. (NASDAQ: QCOR) said it has agreed to buy BioVectra Inc., a supplier of contract manufacturing services, for an upfront payment of C$50 million ($50.7 million).
BioVectra stakeholders could also receive additional cash consideration based on its financial results over the next three years.
Questcor expects the transaction to be immediately accretive to non-GAAP earnings.
BioVectra is a supplier of contract manufacturing services to the global pharmaceutical and biotechnology industry and manufactures active pharmaceutical ingredients (API's), chemical intermediates, and bioprocessing reagents.
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Located in Prince Edward Island, Canada, BioVectra has been Questcor's manufacturing partner for the API in Questcor's H.P. Acthar Gel (repository corticotropin injection) for nearly a decade.
The acquisition will enable Questcor to further secure the manufacturing process trade secrets surrounding Acthar. BioVectra will continue to operate independently in Prince Edward Island, under its existing management team and Questcor plans to support the continued growth of BioVectra's business.
BioVectra's capabilities include synthetic organic chemistry, natural extraction of bioactive compounds from plant and animal-based biomass sources, PEGylation and conjugation chemistry, and fermentation of a variety of molecule types.
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BioVectra's facilities have been approved by United States and Canadian regulatory authorities to produce and supply intermediates, API's and drug substances. Questcor anticipates closing the transaction in January 2013.
BioVectra had sales of about $28 million in its last fiscal year ended August 31, 2012, a 15% increase over its prior fiscal year.
QCOR closed Wednesday's regular session down 2.73% at $25.99. The stock has been trading between $17.25 and $58.91 for the past 52 weeks.