Charlottetown's BioVectra, a supplier to international pharmaceutical companies, has agreed to a purchase by California-based Questcor Pharmaceuticals for an upfront payment of $50 million.
'[It] brings to our company a broader depth of technical and scientific expertise.'— Questcor CEO Don Bailey
The value of the deal could grow to $100 million if BioVectra meets its growth projections.
BioVectra has a relationship as a supplier to Questcor that goes back 10 years. BioVectra manufactures API, a key ingredient in Questcor's flagship Acthar product, which has a number of applications, including the treatment of multiple sclerosis.
"This action puts us in a better position to meet the continuing growth in demand for Acthar," said Questcor CEO Don Bailey in a news release.
"[It] brings to our company a broader depth of technical and scientific expertise, and provides us with a platform for potential international expansion."
BioVectra will continue to operate independently on P.E.I. under its existing management team. BioVectra CEO Ron Keefe said the purchase by Questcor will give the company the opportunity to access the capital it needs to expand.
Biovectra is already on a significant growth curve, said Keefe. In September it opened an $18 million expansion of its Charlottetown facility. The company's $28 million in sales in 2011-12 were 15 per cent higher than in the last fiscal year. Keefe said sales are expected to grow a further 40 per cent this year. The plant currently employs 180 people, 40 more than it did a year ago. Another 20 new hires are expected in the coming year.
Keefe said Questcor's interests in BioVectra go beyond the production of API. The company is also excited about the opportunities for growth provided by BioVectra's other products.
The deal is expected to close this month.