ARTICLE | Company News

Lumara Health, AMAG Pharmaceuticals deal

October 6, 2014 7:00 AM UTC

AMAG will acquire Lumara's maternal health business in a cash and stock deal. Lumara (formerly KV Pharmaceutical Co.) will receive $600 million in cash and 3.2 million AMAG shares worth about $74.4 million based on AMAG's close of $23.18 on Sept. 26, before the deal was announced. Lumara -- which markets preterm birth drug Makena hydroxyprogesterone caproate injection in the U.S. -- will also be eligible for up to $350 million in sales milestones, including $100 million milestone payments triggered if Makena sales reach $300 million and $500 million in any 12-month period and a $50 million one-time payment if Makena sales exceed $200 million every year from 2015-19. Makena is a long-acting form of a naturally occurring progesterone, 17 alpha-hydroxyprogesterone caproate (17P). AMAG said Lumara recorded more than $130 million in Makena sales for the 12 months ended Aug. 31. AMAG reported 2013 revenues of $80.9 million.

Both companies' boards have approved the deal, which is expected to close this quarter. Leerink Partners LLC and JPMorgan were financial advisors to AMAG, and Latham & Watkins LLP and Goodwin Procter LLP were the company's legal advisors. Lumara's financial advisors were Perella Weinberg Partners and T.R. Winston & Co., and its legal advisor was Dechert LLP. AMAG said it plans to finance the deal with a combination of cash on hand, about $75 million of newly issued common stock and $340 million in debt financing from Jefferies Finance LLC. ...