SkyePharma Announces Manufacturing Alliance with the Aenova Group
SkyePharma PLC announces that the SkyePharma Group has agreed terms to enter into an alliance with the Aenova Group to increase utilisation of SkyePharma's manufacturing facility in Saint Quentin-Fallavier, Lyon, France.
- (1888PressRelease) August 16, 2011 - Aenova France SAS ("Aenova"), a wholly-owned subsidiary of Aenova Holding GmbH, a German-based pharmaceutical contract manufacturing organisation, has agreed to lease the entire pharmaceutical manufacturing business ("Manufacturing Business") and the premises at Saint Quentin-Fallavier, Lyon (together the "Facility") for an initial period of two years, extendable for a further three years. During the lease period the parties may have further discussions to extend the Alliance beyond the fifth anniversary.
The Alliance will provide Aenova with access to an FDA-registered pharmaceutical manufacturing facility which has significant available capacity and SkyePharma will benefit from rental income from Aenova. By introducing additional products to the Facility, the Alliance aims to increase utilisation rates and reduce the dependency on relatively few products and the risk of losses in the Manufacturing Business.
The Alliance agreements will come into effect once Aenova has completed certain formalities required to register the Facility as a drug establishment with the US Food and Drug Administration. The effective date is expected to be in August 2011, at which point the Manufacturing Business will be transferred to Aenova as a going concern, including all employees, raw materials and work in progress, and, from that date, Aenova will manage and run the Facility. SkyePharma will retain all its current contractual arrangements with its partners and Aenova will continue to manufacture all SkyePharma products currently manufactured at the Facility and supply them to SkyePharma. SkyePharma plans to work with Aenova to continue to utilise the Facility to manufacture oral products in development by SkyePharma. Aenova intends to carry out technical transfer and development work in order to be able to introduce the manufacture of additional products into the Facility from 2013 onwards.
SkyePharma's Chief Executive Officer, Axel Müller, said: "The alliance with Aenova, which is one of Europe's leading contract manufacturing organisations, provides the opportunity to greatly increase utilisation of our Lyon facility, generate rental income and enable SkyePharma to focus on its core business of developing drug delivery solutions for the global pharmaceutical industry. We believe that, through this alliance, our customers and employees in Lyon will benefit from a more fully utilised facility in the longer term."
Aenova's Chief Executive Officer, Heiner Hoppmann, said: "This is an important strategic move for Aenova, providing us with a leading edge FDA-approved manufacturing site with substantial surplus capacity to support our ambitious plans for growth in the US market. We are looking forward to a long and successful alliance with SkyePharma."
Further financial information
The principal financial terms of the arrangements are as follows:
* Notwithstanding the effective date of the agreements, the financial effect will be backdated as if the Alliance commenced on 1 July 2011.
* Aenova will pay rent at a rate of €1 million (£0.9 million) per annum in cash for the first two years (with the first six months' rent free) from 1 July 2011. On renewal at the end of the first two years the rent is increased to 2m (£1.8 million) per annum in cash.
* Aenova will supply products and services to SkyePharma initially on a pass-through basis. SkyePharma has the opportunity to earn a margin on the sales of these products and services, in the first two years based on the level of net revenues to Aenova from SkyePharma products and services and after that time based on total revenues of Aenova at the Facility.
* The lease is for an initial period of two years subject to certain termination rights of Aenova, related to performance or projected performance of the Manufacturing Business (to the extent it relates to SkyePharma products manufactured and services provided at the Facility). At the end of the first two years, SkyePharma has a 12 month option to renew the lease until the end of the fifth anniversary from commencement. If SkyePharma terminates the lease or doesn't renew it within the 12 month option period, Aenova has a 2 year rent free termination period during which the parties will discuss arrangements either for the continued production and supply by SkyePharma of Aenova products at the Facility or termination of that production.
* On termination or expiry of the lease, the entire Manufacturing Business including all employees, raw materials and work in progress at that time will be transferred back to SkyePharma on similar terms to the transfer to Aenova at inception. On termination or expiry, capital investments made by Aenova during the term of the lease and necessary for manufacturing SkyePharma products will transfer to SkyePharma. These transfers will be free of charge except for certain capital investments related to increase of capacity and/or capabilities to manufacture SkyePharma products, and large environmental protection projects, in which case they will be transferred at net book value and paid for over time.
* The estimated value of the Gross Assets, the subject of the proposed agreement, at 31 December 2010 in the consolidated SkyePharma Group accounts was £9.4m. The profit attributable to the assets, the subject of the transaction, in 2010 would have been a profit before tax of £1.3m. During 2011 the Facility has been currently operating on a broadly cash neutral basis.
For further information please contact:
SkyePharma PLC
Axel Müller, Chief Executive Officer
Peter Grant, Chief Financial Officer
+44 207 881 0524
Singer Capital Markets Limited
Shaun Dobson / Claes Spång
+44 203 205 7500
Financial Dynamics
Jonathan Birt /Sue Quigley
+44 207 831 3113
About SkyePharma PLC
Using its proprietary drug delivery technologies, SkyePharma develops new formulations of known molecules to provide a clinical advantage and life-cycle extension. The Group has twelve approved products in the areas of oral, inhalation and topical delivery. The Group's products are marketed throughout the world by leading pharmaceutical companies.
About the Facility
The Facility is an FDA/EMEA registered pharmaceutical manufacturing facility in France near Lyon. Built in the mid 1990s, with a significant extension completed in 2008, it offers capacity and capability for the manufacture of several solid dosage forms. In addition to standard manufacturing capabilities, the Facility offers several specialised capabilities and capacity:
* Advanced tablet production: bi-layer, tri-layer, and core/coating
* Granulation/drying: large capacity up to 1,200 litre with multiple lines
* Microfluidisation and large capacity pan coating
About Aenova
Aenova Holding GmbH was formed in 2008 through the merger of two high profile mid-sized companies: Dragenopharm Apotheker Püschl GmbH and SWISS CAPS AG. As a result of this merger the Aenova Group belongs today to the leading manufacturers and suppliers of pharmaceutical and health supplements in modern oral dosage forms such as soft gelatine capsules, hard capsules, tablets, film tablets, sugar coated tablets, and effervescence tablets for the Pharma and Healthcare industries. The Aenova Group generates annual sales of approx. €250m and has 1500 employees across its sites in Germany (Tittmoning, Berlin, Bad Aibling, Warstein), Switzerland (Kirchberg and Bioggio), Romania (Cornu) and in the USA (Miami). The Aenova Group, with its HQ in Paehl, thereby offers its customers a Full-Service-Portfolio covering development, purchasing raw materials, production and analysis, through to packaging and logistics.
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