ADVANZ PHARMA Corp. Limited to Acquire Specialty Pharmaceutical Company Correvio Pharma Corp.

PR Newswire

Provides ADVANZ PHARMA with an immediate and direct commercial presence in Germany, France, Spain, Italy, and the Benelux region, while strengthening its existing presence in the Nordics and the United Kingdom
Further diversifies ADVANZ PHARMA's portfolio of medicines by adding established and innovative high-quality brands that are sold in more than 60 countries around the world
Accelerates ADVANZ PHARMA's positioning as a leading Western European platform for niche established medicines with enhanced organic and inorganic growth opportunities
The acquisition is expected to have a total purchase price of approximately $76 million¹including the repayment of certain Correvio indebtedness; ADVANZ PHARMA intends to pay for the acquisition with cash on hand

LONDON, March 16, 2020 /PRNewswire/ - ADVANZ PHARMA Corp. Limited ("ADVANZ PHARMA" or "the Company") (TSX:ADVZ), a global pharmaceutical company focused on serving the needs of patients and healthcare providers around the world with enhanced access to high quality, niche-established medicines, today announced that through its wholly-owned subsidiary, the Company has entered into an arrangement agreement dated March 15, 2020, (the "Arrangement Agreement") to acquire all of the issued and outstanding shares of specialty pharmaceutical company Correvio Pharma Corp. ("Correvio") (NASDAQ: CORV) (TSX: CORV).

The acquisition is expected to have a total purchase price of approximately $76 million¹, which includes the repayment of certain Correvio indebtedness, pursuant to a plan of arrangement ("Plan of Arrangement") under the Canada Business Corporations Act.

Correvio is a Vancouver, Canada-based specialty pharmaceutical company focused on providing innovative, high-quality brands that meet the needs of acute care physicians and patients. Correvio's commercial presence is focused on major European markets with a broader distribution network covering more than 60 countries worldwide. For the nine months ending September 30, 2019, Correvio generated revenue of approximately $21 million.

"The acquisition of Correvio is an important step for ADVANZ PHARMA and is directly aligned with our P.L.A.N growth strategy," said Graeme Duncan, Chief Executive Officer of ADVANZ PHARMA. "Correvio's highly experienced European commercial team provides us with a direct commercial presence in France, Germany, Spain, Italy and the Benelux region, while further strengthening our existing presence in the Nordics and the United Kingdom."

Mr. Duncan continued, "Correvio's niche portfolio, consisting of an established brand, and two growing, patent-protected brands, plus a pipeline of potential product launches, are highly complementary to our current priorities and future focus. This is a transformative transaction that we are very excited about, creating what we believe is a leading global platform with advanced commercial capabilities in Western Europe. This transaction should also enable us to access additional portfolio opportunities going forward, and optimise the launches of our pipeline products."

Mark H.N. Corrigan, MD, Chief Executive Officer of Correvio, commented: "Since announcing our intent to explore strategic alternatives in December 2019, we have diligently evaluated a number of opportunities and concluded that a partnership with ADVANZ PHARMA represents the best outcome for our stakeholders and employees. We believe that bringing the highly skilled and talented employees from the two organizations together will deliver increased scale, depth of commercial capability, breadth of geographical reach and complementary business models to bring important medicines to patients across the globe."

ADVANZ PHARMA believes Correvio's business will be profitable on a pro-forma basis in 2020 through a combination of top line growth and the realisation of synergies.

The Company intends to pay for the acquisition of Correvio with its cash on hand. As of September 30, 2019, ADVANZ PHARMA's cash position was approximately $243 million.

Overview of Correvio's Portfolio of Medicines

Correvio has two marketed, in-hospital, cardiology products: BRINAVESS® (vernakalant HCl, IV), approved in Europe and other territories for the rapid conversion of recent onset atrial fibrillation to sinus rhythm in adults; and AGGRASTAT® (tirofiban HCl), a reversible GP IIb/IIIa inhibitor indicated for use in patients with acute coronary syndrome.

Correvio's licensed medicines include XYDALBA™ (dalbavancin hydrochloride), a second generation, semi-synthetic lipoglycopeptide approved in the European Union for the treatment of acute bacterial skin and skin structure infections (ABSSSI) in adults; and ZEVTERA®/MABELIO® (ceftobiprole medocaril), a semi-synthetic, pro-drug form of a cephalosporin antibiotic for the treatment of community acquired pneumonia and hospital acquired pneumonia, excluding ventilator acquired pneumonia, in adults for select European markets and Israel.

Correvio's pipeline of product candidates includes TREVYENT®, a drug/device combination that is designed to deliver treprostinil, a leading treatment for pulmonary arterial hypertension.

Transaction Details

Under the terms of the transaction, which has been unanimously approved by the boards of Correvio and ADVANZ PHARMA's subsidiary, the Company will be paying $0.42 per issued and outstanding share (the "Consideration"), valuing Correvio's equity at approximately $28 million on a fully diluted basis. The board of Correvio has determined that the arrangement is fair and reasonable to the Correvio shareholders and is in the best interests of Correvio.

Inclusive of the repayment of Correvio's outstanding debt of approximately $48 million, this represents a total consideration of approximately $76 million, excluding Correvio's cash assumed by ADVANZ PHARMA.

As part of the transaction, among other things, (i) each holder of a restricted share unit or phantom share unit of Correvio that is outstanding immediately prior to the effective time will be acquired for cancellation for a cash payment equal to the Consideration; and (ii) all out-of-the-money share purchase options of Correvio will be cancelled for no consideration. All amounts are subject to applicable withholdings.

Correvio has agreed to hold a meeting of its securityholders by no later than May 20, 2020 in order for securityholders to consider and, if deemed advisable, approve the transaction. Closing is subject to obtaining such securityholder approval, obtaining an interim and final order approving the transaction from the Supreme Court of British Columbia, and certain other conditions as set out in the Arrangement Agreement.

Each of Correvio and ADVANZ PHARMA's subsidiary have provided representations and warranties customary for a transaction of this nature and Correvio has provided customary interim period covenants regarding the operation of its business in the ordinary course during such period. In addition, Correvio has agreed to certain non-solicitation covenants and has agreed to pay a termination fee of $3.5 million in the event that it accepts a superior proposal, changes its recommendation that Correvio securityholders vote in favour of the transaction or in certain other circumstances, subject to certain customary exceptions.

In connection with the transaction and subject to closing, Correvio will apply to have its shares delisted from the TSX and Nasdaq and Correvio will cease to be a reporting issuer under Canadian securities law.

A copy of the Arrangement Agreement, which appends a copy of the Plan of Arrangement, will be available on each of the ADVANZ PHARMA and Correvio SEDAR profiles at www.sedar.com.

Each senior officer and director of Correvio has delivered to ADVANZ PHARMA's subsidiary a voting support agreement pursuant to which each such officer and director has agreed to, among other things, vote such person's shares, and other securities convertible into shares, in favour of the shareholder resolution approving the transaction.

The Correvio board of directors has received an opinion from its financial advisor, Piper Sandler Companies, that, subject to the assumptions and limitations contained therein, the transaction is fair, from a financial point of view, to the Correvio shareholders.

ADVANZ PHARMA anticipates the acquisition of Correvio will close in the second quarter of 2020.

PJT Partners is serving as financial advisor, and Fasken Martineau DuMoulin LLP, and White & Case respectively as Canadian and U.S. legal advisors to ADVANZ PHARMA and its board of directors as part of the transaction. Piper Sandler is serving as financial advisor to Correvio. Blake, Cassels & Graydon LLP is serving as legal counsel and Skadden, Arps, Slate, Meagher & Flom LLP is serving U.S. legal counsel to Correvio.

¹All dollar amounts in this press release are in U.S. dollars unless otherwise indicated.

About ADVANZ PHARMA

ADVANZ PHARMA operates an international specialty pharmaceutical business with a diversified portfolio of more than 200 branded and unbranded products, and sales in more than 90 countries, and going forward, is focused on becoming the leading platform for niche-established medicines, with advanced commercial capabilities throughout Western Europe.

ADVANZ PHARMA's registered office is in Jersey, Channel Islands. The Company operates globally through its subsidiaries in Sydney, Australia; Mumbai, India; Dublin, Ireland; Helsingborg, Sweden; Chicago, United States; and its head office in London, England.

About Correvio Pharma Corp.

Correvio Pharma Corp. is a specialty pharmaceutical company focused on providing innovative, high-quality brands that meet the needs of acute care physicians and patients. With a commercial presence and distribution network covering over 60 countries worldwide, Correvio develops, acquires and commercializes brands for the in-hospital, acute care market segment. Correvio's portfolio of approved and marketed brands includes: Xydalba^™ (dalbavancin hydrochloride), for the treatment of acute bacterial skin and skin structure infections (ABSSSI); Zevtera^®/Mabelio^® (ceftobiprole medocaril sodium), a cephalosporin antibiotic for the treatment of community- and hospital-acquired pneumonia (CAP, HAP); Brinavess^® (vernakalant IV) for the rapid conversion of recent onset atrial fibrillation to sinus rhythm; Aggrastat^® (tirofiban hydrochloride) for the reduction of thrombotic cardiovascular events in patients with acute coronary syndrome. Correvio's pipeline of product candidates includes Trevyent^®, a drug device combination that is designed to deliver treprostinil, the world's leading treatment for pulmonary arterial hypertension.

Notice Regarding Forward-looking Statements and Information:

This news release includes forward‐looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward‐looking information within the meaning of Canadian securities laws, regarding ADVANZ PHARMA, its business and the acquisition, which may include, but are not limited to, statements with respect to: ADVANZ PHARMA's focus on serving the needs of patients and healthcare providers around the world with niche-established medicines; all conditions to closing the acquisition being satisfied and ADVANZ PHARMA's acquisition of CORREVIO being completed; CORREVIO's business, prospects and product portfolio; Correvio's business being profitable on a pro-forma basis in 2020 through a combination of top line growth and the realisation of synergies; the acquisition of CORREVIO diversifying ADVANZ PHARMA's revenue base and position as the leading platform for niche-established medicines with advanced commercial capabilities throughout Western Europe; CORREVIO providing ADVANZ PHARMA with an immediate and direct commercial presence in Germany, France, Spain, Italy and Benelux Region while strengthening its existing presence in the Nordics and UK; the acquisition of CORREVIO providing increased scale, depth of commercial capability, breadth of geographical reach, complementary business models, and a unique platform to bring in further product opportunities; Correvio's product pipeline; ADVANZ PHARMA's intention to pay for the acquisition of CORREVIO in cash, and the timing of the closing of the acquisition in the second quarter of 2020. Often, but not always, forward‐looking statements and forward‐looking information can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative and grammatical variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations of ADVANZ PHARMA's management, and are based on assumptions and subject to risks and uncertainties. Although ADVANZ PHARMA's management believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect. The forward‐looking events and circumstances discussed in this news release may not occur by certain dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting ADVANZ PHARMA, including risks associated with ADVANZ PHARMA's securities, increased indebtedness and leverage, ADVANZ PHARMA's growth, risks associated with the use of ADVANZ PHARMA's products, the inability to generate cash flows, revenues and/or stable margins, the inability to repay debt and/or satisfy future obligations, risks associated with a delay in releasing ADVANZ PHARMA's financial statements (which could result in a default under ADVANZ PHARMA's debt agreements and a violation of applicable laws), ADVANZ PHARMA's outstanding debt, risks associated with the geographic markets in which ADVANZ PHARMA operates and/or distributes its products, risks associated with distribution agreements, risks associated with the acquisition and the integration of CORREVIO into the operations of the Company, the pharmaceutical industry and the regulation thereof, regulatory investigations, the failure to comply with applicable laws, economic factors, market conditions, risks associated with growth and competition, the failure to obtain regulatory approvals or the approval of securityholders and/or the court in connection with the acquisition, the equity and debt markets generally, general economic and stock market conditions, risks associated with fluctuations in exchange rates (including, without limitation, fluctuations in currencies), political risks (including changes to political conditions), risks associated with the United Kingdom's exit from the European Union (including, without limitation, risks associated with regulatory changes in the pharmaceutical industry, changes in cross‐border tariff and cost structures and the loss of access to the European Union global trade markets), risks related to patent infringement actions, the loss of intellectual property rights, risks and uncertainties detailed from time to time in ADVANZ PHARMA's filings with the Canadian Securities Administrators, and many other factors beyond the control of ADVANZ PHARMA. Although ADVANZ PHARMA has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward‐looking statements and information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward‐looking statement or information can be guaranteed. Except as required by applicable securities laws, forward‐looking statements and information speak only as of the date on which they are made and ADVANZ PHARMA undertakes no obligation to publicly update or revise any forward‐looking statement or information, whether as a result of new information, future events, or otherwise.