Novagali Pharma
Ocular therapeutics (sold to Santen Pharma for $139M in 2011)

Santen Strikes Deal to Acquire Novagali (2011)

Novagali Pharma Changes Name to Santen After Acquisition (2013)

September 28, 2011:

Japan’s Santen has engineered a pact to buy up the French biotech Novagali Pharma and its ophthalmology pipeline in a deal worth about $139 million for its investors. Novagali, which is helmed by French scientist Jerome Martinez, has been developing a late-stage drug which promises to rival Allergan’s Restasis, which earned $620 million in 2010.

The buyer structured the deal to acquire slightly more than half of Novagali’s shares at €6.15 each–snapping up shares held by Edmond de Rothschild, Auriga Partners, IdInvest Partners and CDC Innovation for a hefty 71% premium. They then plan to offer a tender offer for the remaining shares, paying a small bonus for all the shares once they line up 95% of the stock. In addition to its experimental drugs in the pipeline, Novagali has a marketed drug-Cationorm-on the market.

The buyout gives Rothschild’s and the other investors a clean cash exit, which is rather rare these days for a biotech with a pipeline of experimental meds. Rothschild’s has been scouting around for new investors interested in backing a new fund.

One of Novagali’s prime assets is the Phase III dry eye treatment Cyclokat. Investigators began recruiting patients for the late-stage treatment last spring, looking to demonstrate that the biotech’s absorption optimizing tech would prove effective in a once-daily treatment for severe dry eye. Santen is banking that the drug will get flagged for an approval, adding to its lineup of ophthalmology treatments as the world’s population ages, suffering from the corrosive effects of pollution and over-exposure to computer screens.

“Santen believes that by acquiring Novagali, it will be able to strengthen its global business platform, which is one of the key strategic focus of its long term vision for 2020 as well as its medium term management plan for 2011-2013,” said Santen CEO Akira Kurokawa.

The buyout gives Rothschild’s and the other investors a clean cash exit, which is rather rare these days for a biotech with a pipeline of experimental meds.