Arecor Therapeutics raising £6m to acquire diabetes medicine specialist Tetris Pharma
Arecor Therapeutics is raising about £6million to acquire Tetris Pharma.
The companies have entered into a conditional agreement on the deal, which will add a key commercial diabetes product into Arecor’s portfolio.
Tetris Pharma, based in Mears Ashby, near Northampton, is a commercial stage speciality pharmaceutical company with a sales and distribution team and a platform focused on injectable products across the UK and Europe.
AIM-quoted Arecor anticipates the acquisition could accelerate its revenue growth significantly. Tetris Pharma has an exclusive supply agreement and licence to sell the first stable liquid ready-to-use glucagon auto-injector pen, Ogluo, within the European Economic Area, UK and Switzerland. Launched in the UK earlier this year, and due to launch across key European territories over the next 12 to 24 months, it is designed to treat severe hypoglycaemia, a potentially life-threatening condition, in people with diabetes.
Sarah Howell, CEO of Chesterford Research Park-based Arecor, said: “The board of Arecor believe that the acquisition of Tetris Pharma is a compelling opportunity to accelerate Arecor’s commercially-driven strategy alongside our core diabetes and partnered products businesses.
“We will gain an existing, revenue-generating, sales, marketing and distribution platform which we believe is highly complementary to our existing specialty hospitals products business and has significant growth potential.
“The lead product, Ogluo, meets a key patient need for people living with diabetes at risk of severe hypoglycaemia, which is a therapeutic area that we understand well, giving us confidence in its prospects and our ability to deliver.
“In addition, the platform would add future optionality to our specialty products franchise by providing the capability to take selected products to market in the UK and Europe where appropriate in addition to our already proven partnering strategy.”
The deal will also provide Arecor with the potential to take selected niche specialty hospital products to market in the UK and Europe.
Tetris Pharma, which generated initial revenues of around £600,000 in the first six months of the year, is expected to break even within about three years of the deal completing.
Arecor will acquire the entire issued share capital of Tetris Pharma by issuing 651,726 new ordinary shares to the sellers of Tetris Pharma Sellers, and has agreed to discharge certain existing liabilities of Tetris Pharma worth £2million.
Deferred consideration of up to £4m will be payable to the Tetris Pharma sellers through three earn out payments on the first, second and third anniversaries of completion of the acquisition, subject to revenue and EBITDA performance targets
The deal is conditional on the placing of new ordinary shares at 300p each, via an accelerated book building process.