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news.GlaxoSmithKline has agreed to purchase Canadian biotechnology company ID Biomedical for approximately $1.4 billion. ID Biomedical is dedicated to the manufacturing and development of vaccine products, including influenza vaccines.
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GSK’s proposed acquisition of ID Biomedical reflects its desire to address the public health need for an increased supply of influenza vaccines, amid fears of a global influenza breakout, and after a significant US shortfall in flu vaccines last year.
The move will further strengthen GSK’s presence in the fast-growing influenza market after its own flu vaccine, Fluarix, was recently approved by the FDA in time for the forthcoming influenza season.
ID Biomedical is currently in the process of expanding and upgrading its Canadian manufacturing facilities, which are expected, beginning in 2007, to produce around 75 million doses per year of ID Biomedical’s Fluviral egg-based influenza vaccine.
ID Biomedical will become a wholly-owned subsidiary of GSK. Under the terms of the agreement, the shareholders of ID Biomedical will be entitled to receive C$35 per share for a value of approximately C$1.7 billion ($1.4 billion).
This represents a premium of 13% over the closing price of the shares on 6 September, 2005, and a premium of 30% over the 20-day average share price.
At closing, GSK will also assume responsibility for ID Biomedical’s net debt of $77 million. In addition, GSK has agreed to loan ID Biomedical up to $120 million to repay term debt and finance its cash requirements to the anticipated closing date.
“GSK has moved quickly over the past few months to meet the growing demand for flu vaccines worldwide and to transform GSK into one of the leading global influenza vaccine manufacturers,” said Jean-Pierre Garnier, CEO of GSK. “The proposed acquisition of ID Biomedical is a unique strategic opportunity to increase current capacity of classic flu vaccines, to provide us with increased capacity for next generation flu vaccines under development and to help GSK prepare for the threat of a flu pandemic.”