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Xanodyne Pharmaceuticals, Backed by MPM Capital-led Syndicate,
Approved to Acquire Pain Management Portfolio
aaiPharma known for broad portfolio of pain pharmaceuticals including
Darvon/Darvocet
FLORENCE, Ky. and BOSTON, July 18 /PRNewswire/ -- Xanodyne Pharmaceuticals,
Inc., a specialty pharmaceutical company focusing on innovative products in the
therapeutic areas of women's health and pain management, today announced that
the Bankruptcy Court for the District of Delaware has approved its bid to
acquire the pharmaceutical assets of aaiPharma (PINK SHEET: AAIIQ). The deal
terms included $209.25 million cash and additional non-cash consideration.
Xanodyne, a private company financed by an equity syndicate led by MPM Capital,
and co-led by Apax Partners, headquartered in Greater Cincinnati, is dedicated
to providing patient care in women's health and pain management. Other new
investors included Perseus-Soros BioPharmaceutical Fund and affiliates of AIG
Global Investment Group, while Silver Point Finance provided Xanodyne a term
debt and revolver facility. The new investors were also joined in the financing
by existing investors, Healthcare Ventures, Essex Woodlands, Blue Chip Venture
Company and Coleman Swenson Hoffman Booth. Xanodyne was a logical buyer of the
aaiPharma portfolio and through this acquisition is strengthening its offering
of high quality, effective pain management pharmaceuticals to physicians and
their patients.
This acquisition will bring a number of currently marketed pain management
agents into the Xanodyne portfolio, including Darvon(R) and Darvocet(R), two
drugs with a strong heritage in pain management. The purchase also includes
three pain products that are presently in clinical development and one other
early-stage development product. The combined business will have pro-forma 2005
revenues of approximately $100 million, and will create a new force in the
specialty pharmaceuticals sector.
"We have believed for some time that the two businesses fit very well
together," said William Nuerge, chief executive officer of Xanodyne. "Xanodyne
brings a pipeline of women's healthcare products and a strong commercial
capability and infrastructure for both women's healthcare and pain management
products, while aaiPharma has a broad range of currently marketed and pipeline
pain products. With this acquisition, Xanodyne has a comprehensive portfolio of
pain management and women's health products, including six key development
compounds - three in each of its main therapeutic areas of focus - as well as
the ability to develop and commercialize its assets. I am not aware of any
evolving specialty pharmaceutical company with the combination of people,
products, performance, pipeline and potential that we now have at Xanodyne."
According to Steven St. Peter, M.D., general partner, MPM Capital, "The
portfolio includes some of the most widely prescribed pain products and a
growing business in women's health. The products in development are very
synergistic, and this management team knows exactly how to launch and position
these products."
"For MPM, this deal represents an important dimension of our investment
strategy," said Ansbert Gadicke, M.D., general partner, MPM Capital. "We are
actively looking to identify diversely held assets that can be combined with a
commercial product portfolio and a development pipeline to create robust cash
flow and fund future product development."
"Xanodyne's strong management team and employee base, new products pipeline,
commercial capabilities, and strong performance were very attractive to us,"
said Adele Oliva, partner, Apax Partners, L.P. "Our organization, as well as
the entire investor group, has great confidence in Xanodyne's ability to be a
major player in pain management and women's healthcare and achieve its vision
of growth."
"We are delighted to be joined by a superb new investment syndicate as
Xanodyne's management team continues towards its objective of becoming a
leading pain management and women's health care products company. It was very
important to identify an equity sponsor capable of understanding the
development-stage assets, growth potential of the products, complexity of the
situation, and having the financial scale to complete the transaction," said
James H. Cavanaugh, Ph.D., chairman of Xanodyne.
Nuerge added, "A significant feature of the transaction will be an on- going
relationship between Xanodyne and aaiPharma Development Services, and we hope
to be one of aaiPharma Development Services' preferred customers. We are
committed to using their cutting edge technology and top-notch development
services to complete our current pipeline and further extend it."
Ludo Reynders, Ph.D., chief executive officer of aaiPharma Inc., re- enforced
that point, "By letting Xanodyne focus on their commercial expertise, aaiPharma
is freed to focus on its strengths in product development. The relationship is
very symbiotic by design."
A new Board of Directors has been established to guide the organization. James
Cavanaugh, Ph.D. (Healthcare Ventures), James Currie (Essex Woodlands), and
William Nuerge (Xanodyne CEO) remain on the Board and will be joined by Ansbert
Gadicke, M.D. (MPM), Steven St. Peter, M.D. (MPM), Adele Oliva (Apax Partners)
and Dennis Purcell (Perseus-Soros). Cavanaugh continues as chairman of the
board.
Xanodyne was advised by Bear, Stearns & Co., Inc. and Dinsmore & Shohl LLP; the
equity sponsors were advised by Lazard and Weil, Gotshal & Manges (bankruptcy
counsel) and Palmer & Dodge (corporate counsel).
About Xanodyne
Xanodyne Pharmaceuticals, Inc. is a privately owned, fully integrated, branded
specialty pharmaceutical company focusing on innovative products in the
therapeutic areas of women's health and pain management. The company, located
in the greater Cincinnati area, has a nationwide sales force and currently
markets numerous pharmaceutical products. More information regarding Xanodyne
can be accessed at http://www.xanodyne.com/.
About MPM
MPM Capital L.P. is a global investment management firm focused solely on life
sciences investing. One of the largest investment management firms dedicated to
the life sciences sector, MPM Capital has offices in Boston and San Francisco.
MPM's portfolio ranges from start-ups to large capitalization public companies,
with a primary focus on biopharmaceutical and medical device companies nearing
commercialization of products or those companies that already offer
product-driven opportunities. The firm manages over $2.1 billion in assets
through the MPM BioVentures Family of venture capital funds and the MPM
BioEquities public market funds. More information on MPM can be found at
http://www.mpmcapital.com/.
About Apax Partners
Apax Partners is one of the world's leading private equity investment groups,
operating across the United States, Europe and Israel. Apax Partners has raised
or advised approximately $20 billion around the world. With more than 30 years
of direct investing experience, Apax Partners' Funds provide long-term equity
financing to build and strengthen world-class companies. It pursues a
multi-stage equity investment strategy, investing in late venture, growth
capital and buyouts. Apax Partners' Funds invest in companies across its 6
chosen global sectors of telecommunications, IT, retail and consumer, media,
healthcare and financial/business services. For additional information refer to
http://www.apax.com/ or contact Laura Brightsen, Director Marketing,
212-419-2461.
NOTE TO EDITOR'S: CEO Bill Nuerge available for interview.
DATASOURCE: Xanodyne Pharmaceuticals, Inc.
CONTACT: Xanodyne Contact, Susan McDonald of Justice & Young Public
Relations, +1-513-388-4700 ext. 3014, or ; or
Syndicate Contact, Shari Annes of MPM Capital, +1-650-888-0902, or
Web site: http://www.xanodyne.com/
http://www.mpmcapital.com/
http://www.apax.com/