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Private equity-backed Covis to buy AMAG Pharma in $650M deal

  • Covis Group, a specialty pharmaceuticals company backed by private equity firm Apollo Global Management, has agreed to buy AMAG Pharmaceutical in a deal valued at approximately $650 million including debt, the companies announced Thursday.
  • Per deal terms, Covis will acquire all outstanding AMAG shares for $13.75 in cash, a price that values the drugmaker at a 46% premium to its closing price Wednesday. The companies expect the deal, worth $498 million on a fully diluated basis, to close in November 2020 following a tender offer. 
  • In AMAG, Covis acquires a company that’s struggled through a clinical setback for its top drug and a recent fight with activist investor Caligan Partners. In January, AMAG restructured, parting ways with its CEO and divesting two women’s health drugs. 

The company Covis is acquiring looks different than the AMAG of last year. 

A year ago, AMAG had just launched Vyleesi, a pill for low sexual desire in women and its third women’s health medicine alongside Makena, an injection to reduce the risk of preterm birth, and Intrarosa, a non-estrogen treatment for painful sex due to menopause. 

But investors, including Caligan Partners, were skeptical of the company’s path forward, particularly after Makena failed a key confirmatory study and a Food and Drug Administration panel recommended the drug’s withdrawal from market. 

In January, AMAG announced its CEO William Heiden would step down and that it would sell both Vyleesi and Intrarosa, divestments it completed in May and July of this year. 

Now, the company’s focus is weighted more heavily on Feraheme, a marketed product for iron deficiency anemia, and an experimental drug called ciraparantag. Currently in Phase 2 testing, ciraparantag is a reversal agent for blood thinners like Xarelto and Eliquis. 

Ami Fadia, an analyst at SVB Leerink, views ciraparantag as having the greatest potential of AMAG’s remaining assets, citing Alexion Pharmaceuticals’ recent $1.4 billion deal to buy Portola Pharmaceuticals and its similar reversal agent, Andexxa. 

Based in Switzerland, Covis Pharma sells a range of specialty pharmaceuticals and in February was sold to funds managed by affiliates of Apollo Global Management, a private equity firm. 

Covis’ proposed acquisition is the latest biotech buyout in a year that’s had comparatively fewer than 2019 and 2018 through September. Most recently, Gilead Sciences agreed to buy cancer drugmaker Immunomedics in the the biggest buyout of 2020.