Healthcare company Fresenius Kabi has initiated a $250 million expansion of its Illinois manufacturing location and acquired Merck KGaA's biosimilars business.
Healthcare company Fresenius Kabi, a subsidiary of the German-based Fresenius SE and Co. KGaA, reported Friday that it had broken ground on a $250 million expansion of its Illinois manufacturing location. The facility will include aseptic filling lines, freeze-drying capabilities, formulation areas, a warehouse, and an administration building.
Earlier this month, the company completed its acquisition of Merck KGaA’s biosimilars business. The sale included the entire development pipeline of Merck’s biosimilars, which Fresenius Kabi reports has current annual sales of approximately $30 billion. The €656 million (approximately $777.5 million) purchase price included an up-front payment of €156 million (approximately $184.9 million) and additional milestone payments. The company expects to break even on the acquisition in 2022, after which time it says the biosimilars business will be “significantly accretive” to its net income.
Fresenius Kabi announced its purchase of the biosimilars business in April, when it said that it would expect its first biosimilars sales near the end of 2019. Mats Henriksson, CEO of Fresenius Kabi, said of the plan, “Biosimilars are a fast-growing segment within the pharmaceutical market. Some of the largest biological branded products will go off patent over the next years. With this acquisition, Fresenius Kabi enhances its position as a leading player in the injectables pharmaceutical market and further diversifies its product portfolio. The acquisition creates a platform for further growth.”
At the same time as Fresenius Kabi announced its plan to acquire Merck’s biosimilars business, it also indicated that it would purchase drug maker Akorn, Inc, which manufactures prescription and over-the-counter drugs for sale in the US marketplace. It negotiated a price of $34 per share of the business (equivalent to $4.3 billion), plus $450 million of Akorn’s debt. The deal gives Fresenius Kabi ownership of Akorn’s robust pipeline of Abbreviated New Drug Applications filed and pending with the FDA, as well as many more in development.