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Posted on February 20, 2013 | Atlantic Business Magazine | 0 Comments
U.S. firm acquires BioVectra for at least $50 million
A 43-year-old P.E.I. biopharmaceutical company has been acquired by an American firm.
Questcor Pharmaceuticals of Anaheim, California finalized a $50-million deal in January to acquire all issued and outstanding shares of Charlottetown-based BioVectra Inc. Up to another $50 million could be paid to shareholders over the next three years, contingent on BioVectra’s financial results, making the deal potentially worth $100 million.
Ron Keefe, BioVectra’s CEO, was characterized in the Jan. 3 edition of Charlottetown’s Guardian newspaper as “confident” that the deal will be worth $100 million.
“We’re expected to grow by about 40 per cent in terms of revenue this year, and we’ve increased our employment numbers,” said Keefe.
BioVectra and Questcor have partnered for several years on the production of H.P. Acthar Gel, an injectable drug used to treat some forms of kidney disease, multiple sclerosis relapses and infantile spasms, as well as some autoimmune muscle diseases.
Questcor says the BioVectra acquisition will protect “trade secrets” around the production of Acthar as well as ensure a stable supply and quality control of the drug. In turn, BioVectra says it will receive muchneeded capital funds to continue its strong growth pattern.
“We’re growing very rapidly and, as you grow, one of the things you need is continued access to capital,” Keefe said in the Guardian. However, he confirmed via e-mail that the up to $100 million from Questcor would be used to purchase shares and that “. . . new investment [in BioVectra] will be determined at a future date.”
All indications are that the company will remain in Charlottetown, where it employs approximately 185 workers in three manufacturing facilities. The company opened an $18-million expansion in September 2012 at its site near the Charlottetown Airport. The construction was funded primarily through a $14.8-million loan provided by the P.E.I. government. The 2010 loan was made to BioVectra through the provincial government’s P.E.I. Century 2000 Fund, Inc. The PEICF, according to its 2009-2010 Annual Report, is financed by immigrant investor funds provided by the federal government, and makes nonrenewable, five-year loans to P.E.I. businesses to stimulate economic growth. Keefe says the loan is being repaid over a 10- year term.
BioVectra has its roots in Diagnostic Chemicals Ltd., a company incorporated in 1970 by Dr. Regis Duffy, then dean of the Faculty of Science at the University of P.E.I. DCL’s first manufacturing facility opened in Charlottetown’s West Royalty Business Park in 1976. The biochemical division of DCL began operating as BioVectra DCL in 2001 and as BioVectra Inc. in 2007.
By Laurie McBurney
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