Skin care specialist LEO Pharma acquires Japanese Astellas for € 675 million

LEO Pharma and Japanese pharmaceutical company Astellas Pharma Inc. have entered into an Asset Purchase Agreement under which Astellas will transfer its global dermatology business to LEO Pharma for € 675 million.

Under the terms of the agreement, the assets and associated responsibilities relating to Astellas’ global portfolio of dermatology products – which include Protopic, treatment for eczema, and other products for the treatment of acne and skin infection – will be transferred to LEO Pharma (except for Protopic in Japan).

LEO Pharma says recent years of strengthening its global presence has created a strong foundation for the integration of global activities such as the dermatology portfolio from Astellas. The acquisition is a pivotal step on LEO Pharma’s further growth journey to become the preferred dermatology care partner in the world, the company has said.

According to LEO Pharma, the transaction will be the largest in its more than 100-year history in terms of incremental turnover. The company expects to increase its annual turnover by more than 20% once the portfolio is fully transferred. With the agreement, LEO Pharma will affirm its presence in markets such as China and Russia and adds critical scale in many other markets.

LEO Pharma said that this merger shows its commitment to its 2020 strategy. Internal innovation together with growth through acquisitions and partnerships serves to strengthen the company’s global position as a preferred partner in dermatology.

“This is a historic milestone for LEO Pharma and will be instrumental in our efforts to help even more people living with skin diseases. We are excited about this opportunity and look forward to working closely with Astellas to ensure a seamless transfer of the portfolio,” said Gitte Aabo, CEO and President of LEO Pharma.

“With our expanded portfolio, we will be able to offer patients an even wider range of treatment solutions to meet their individual needs. For LEO Pharma, leading in dermatology care is about making a real difference to people’s everyday lives.”

LEO explains that the Astellas dermatology portfolio comprises prescription and over-the-counter products, including established and strong brands such as Protopic for eczema, Locoid and Locobase for skin care and Zineryt for acne.

Yoshihiko Hatanaka, President and CEO of Astellas said: “Astellas continuously considers its strategy and as a result, we reached this decision. We feel that dermatology patients around the world will be better served by transferring these products to LEO Pharma, a company with a strong focus on the dermatology therapeutic area. We are pleased to work with LEO Pharma to ensure smooth continuation of product supply around the world.”

The closing of this transaction is expected in the first quarter of 2016.

The transaction does not include any manufacturing facilities, LEO pharma has noted.

J.P. Morgan is acting as financial advisor, Kromann Reumert as legal advisor and PricewaterhouseCoopers as financial and tax due diligence adviser to LEO Pharma.