A biopharmaceutical company in Colorado recently announced they are acquiring a privately held company in Italy. Clovis Oncology, based out of Boulder, said they will pay $200 million for the acquisition of EOS S.p.A.
Why did the company want to acquire the Italian company? EOS owns the rights to lucitanib, which is used in treatments for certain types of cancer. Through the acquisition, Clovis Oncology will now have the rights to develop and commercialize lucitanib in the United States and Japan. Clovis Oncology will have to work with the company that owns the rights in China since EOS sublicensed the rights to the drug to a company in China last year.
The CEO of Clovis Oncology said they had been interested in this drug for a while and acquired the Italian company to be able to use the drug in their current research and programs.
Clovis Oncology agreed to pay $200 million for EOS. The purchase price is $10 million in cash, and the rest of the purchase will be in stock in Clovis Oncology. In addition to the cash and stock, Clovis Oncology will also pay $65 million in cash after the U.S. Food and Drug Administration initially approves lucitanib in the U.S.
The acquisition should be very beneficial for the Colorado company. After the acquisition was announced, the company's stock increased by almost 17 percent.
This is an example of how companies in Colorado can acquire other businesses to help their own mission and stock. Acquisitions can be a complicated legal issue for many companies, especially when you are dealing with a business outside of the U.S. It is very important to understand the impact acquiring the business will have on your financial portfolio before making any final decisions.
Source: Denver Business Journal, "Clovis Oncology pays $200M for Italian company," L. Wayne Hicks, Nov. 20, 2013