Emergent BioSolutions has agreed to acquire the ACAM2000® [Smallpox (Vaccinia) Vaccine, Live] business of Sanofi Pasteur for up to $125 million cash, in a deal the buyer said would reinforce its strategic focus on treating public health threats.

ACAM2000 is the only FDA-licensed smallpox vaccine for active immunization against smallpox disease for patients deemed at high risk for smallpox infection.

Acquiring ACAM2000, Emergent said, will expand its portfolio of only-in-class products, diversify its portfolio of medical countermeasures against Category A bioterrorism agents, and complement its existing smallpox countermeasure offering VIGIV [Vaccinia Immune Globulin Intravenous (Human)], the only FDA-licensed therapeutic for certain complications from smallpox vaccination.

VIGIV was licensed by the FDA in May 2005 for counteracting complications that can be associated with ACAM2000. VIGIV uses the same vaccinia virus used in ACAM2000. That virus is not the smallpox virus, but similar enough to elicit a protective immune response when used as a smallpox vaccine, according to Emergent.

Emergent acquired VIGIV as part of its $222 million purchase of Cangene. Emergent does not break out product sales of VIGIV, though sales of VIGIV to the Strategic National Stockpile (SNS) were part of the $59.248 million in “other” product sales recorded by the company last year.

Also to be acquired by Emergent is a cGMP bulk manufacturing facility in Canton, MA, and a lease to a cGMP fill/finish facility in Rockville, MD, some 7 miles south of the company’s headquarters in Gaithersburg, MD. The facilities employ 100 people.

By acquiring the facilities, “Emergent expects that the transaction will enhance its contract manufacturing operations,” the company stated. The transaction with Sanofi includes an agreement to contract manufacture at the Canton site Sanofi's Japanese encephalitis virus vaccine (JEVV), marketed under the brand name Imojev® (JE-CV), and previously known as ChimeriVax™, with Sanofi to supply necessary materials.

Emergent saw its contract manufacturing revenue increase 14% last year compared with 2015, rising to $49.138 million or 10% of total revenues.

Emergent agreed to pay Sanofi Pasteur $97.5 million upfront and up to $27.5 million in payments tied to achieving regulatory and manufacturing-related milestones.

Deal Includes CDC Contract

As part of the deal, Emergent is also acquitting an existing 10-year contract with the U.S. Centers for Disease Control and Prevention (CDC) for deliveries of ACAM2000 to the SNS. The CDC contract was originally valued at up to $425 million, but now has a remaining value of up to approximately $160 million, the company added.

“This transaction diversifies our portfolio and broadens our countermeasure franchise with a vaccine that is being stockpiled both in the U.S. and internationally,” Emergent president and CEO Daniel J. Abdun-Nabi said in a statement. “This acquisition fits squarely within our core strategy and business focus, and we look forward to closing this transaction and to integrating this business into our operations.”

Abdun-Nabi said Emergent expects the acquisition to “meaningfully” contribute to revenue growth in 2018 and position the company closer to its goal of generating $1 billion in total revenue by 2020.

Emergent finished last year less than halfway to that goal, with $488.8 in total revenues after excluding the company’s former biosciences business, which was spun off in August 2016 into a separate publicly traded company, Aptevo Therapeutics. Net income was $62.5 million, down 0.6% from $62.9 million in 2015, when the company generated $522.8 million in total revenues, a figure that includes the spun-out business.

During Q1 of this year, according to results released May 4, Emergent generated $10.5 million in net income on $116.9 million in total revenues.

“We further anticipate that ACAM2000 will help us achieve our goal of generating more than 10% of total revenue from international markets,” Abdun-Nabi added.

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