Drugmaker Jazz Pharmaceuticals PLC said Thursday it will buy cancer drug maker EUSA Pharma Inc. in a deal worth as much as $700 million.
Jazz, which specializes in developing products to needs that are unmet, said it will pay $650 million upfront for the privately held company, plus another $50 million if EUSA's leukemia drug Erwinaze reaches a target for U.S. sales in 2013.
The Food and Drug Administration approved Erwinaze in November. The drug is intended to treat acute lymphoblastic leukemia, which is the most common type of cancer in children.
The companies said Erwinaze has orphan drug status in the U.S. until November 2018, and it has other marketing exclusivity through 2023. It is approved in seven other countries and marketed under the name Erwinase.
EUSA, which has 180 employees, had $46 million in revenue in the first quarter. Jazz and EUSA said the sale should add 75 cents to 85 cents per share to Jazz's adjusted profit in 2013, and $210 million to $230 million in revenue.
EUSA's other products include ProstaScint, an imaging agent that is used in diagnosing prostate cancer; Quadramet, a pain drug for cancer patients whose tumors have spread to the bone; and Caphosol, a treatment for the buildup of mucus in the mouth and throat. Called oral mucositis, the syndrome is a common side effect of some cancer treatments.
The company also is studying an intravenous version of Erwinaze and a treatment for acute graft-versus-host disease in patients who have not been helped by steroid therapy.
Jazz and EUSA said the deal should close in June, pending approval by antitrust regulators. Jazz plans to take out a new $500 million term loan to finance the deal, along with a $100 million revolving credit facility.
Shares of Jazz Pharmaceuticals lost 18 cents to end regular trading Thursday at $45.20 before the deal was announced. They jumped $5.05, or 11.2 percent, to $50.25 afterward.
EUSA has home offices in Langhorne, Pa., and Oxford, England. Jazz in based in Dublin.