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Halozyme, doubling down on a licensing strategy, buys a drug delivery biotech for nearly $1B

Dive Brief:

  • Halozyme Therapeutics, a San Diego-based company whose business revolves around a type of drug delivery technology, announced Wednesday plans to expand its offerings through a nearly $1 billion acquisition of Antares Pharma.

 

  • Antares sells four products and sports an auto-injector technology, which Halozyme highlighted as a key asset in the deal. In a statement, Halozyme said Antares’ auto injector could be used with a “broad range of medications” and help it generate substantial revenue through licensing deals.

 

  • Halozyme expects the transaction to be immediately accretive to its revenue this year. Having secured unanimous approval from both of their boards, the companies believe the deal will close by the end of June.

 

Dive Insight:

Of the $443 million in revenue Halozyme recorded last year, about three-fourths came from royalties and collaborations. That’s because Halozyme’s technology, and the out-licensing of it, has been more profitable than the company’s own efforts to develop drugs.

The technology works by using an engineered enzyme to break down a kind of large molecule in the space just under the skin. Degrading these molecules, according to Halozyme, allows drugs that are given subcutaneously to be given administered at a larger volume and with better dispersion.

Such a technology has proven attractive to many large pharmaceutical companies, which have shown a growing interest in more advanced drugs like antibody therapies that are given through a needle or infusion. Currently, Halozyme counts Roche, Johnson & Johnson, Bristol Myers Squibb and Takeda as research partners, along with a string of smaller biotechnology companies like Argenx and Horizon Therapeutics.

Altogether, Halozyme lists 22 partnered drug programs in its pipeline.

The company hopes to further expand that list with the addition of Antares’ auto-injector platform. Already, Antares has licensing deals in place with Pfizer and Teva Pharmaceuticals, among other companies.

Upon closing of the deal, Halozyme said one focus will be securing additional intellectual property to safeguard Antares’ technology beyond 2030. The company also believes its technology and experience will pair well with Antares’, offering the potential to create new drug delivery devices.

Halozyme estimates the various market segments to which Antares’ technology could be applied represent billions of dollars in potential sales. The company noted, too, that its acquisition should enhance growth and cash flow generation through 2027, giving it the flexibility to pursue new products and partnerships.

At $5.60 per share, Halozyme’s offer represents a 50% premium to Antares’ closing stock price from Tuesday, the third highest premium paid in a biotech acquisition this year, according to data compiled by BioPharma Dive.