Advanced BioHealing to be Acquired by Shire for $750 Million

Posted by | May 17, 2011

Advanced BioHealing to be Acquired by Shire for $750 MillionEarlier this afternoon, life sciences partner company Advanced BioHealing (ABH) announced it had signed a definitive agreement to be acquired by Shire plc (LSE: SHP, NASDAQ: SHPGY), a leading $50+ billion, world leading specialty biopharmaceutical company.

The transaction is expected to close late in the second quarter or early in the third quarter of 2011. It is anticipated that Safeguard will receive aggregate cash proceeds of more than $140 million in connection with the transaction, which represents a more than 13x cash-on-cash return.

ABH’s acquisition by Shire represents Safeguard’s third life sciences partner company exit transaction in the last six months. In December 2010, Clarient was acquired by GE Healthcare for $587 million. Safeguard realized a total of more than $200 million in cash from the sale of its equity interests in Clarient between 2009 and 2010, representing the largest cash return in Safeguard’s history. In addition in December 2010, Avid Radiopharmaceuticals was acquired by Eli Lilly for an upfront payment of $300 million and up to $500 million in additional contingent payments based on Avid’s achievement of certain challenging regulatory and revenue milestones.

Clearly, Safeguard’s value-creation momentum continues to build with Shire’s acquisition of ABH. By adhering to our disciplined strategy, we have been able to support our partner companies financially and operationally to drive growth.  With Dermagraft, ABH has transformed the way diabetic foot ulcers, a chronic medical condition facing many diabetes patients, are being treated, while also offering a possibility to extend Dermagraft’s utility to other areas of wound healing.

Safeguard first deployed capital in ABH in February 2007, when the company had virtually no revenue.  Since that time, ABH has established a robust commercial infrastructure and scaled its cell-based manufacturing capability. By 2010, revenues had grown to approximately $150 million. As a result of its tremendous progress and market penetration, Shire believes ABH would be a valuable addition to its renowned portfolio of healthcare products. In particular, Shire stated earlier that it is ‘establish[ing] a new Regenerative Medicine business unit through the cash acquisition of ABH.’

We are proud of ABH’s success in building a premier regenerative medicine company. We believe that these three outstanding life sciences partner company exit transactions in the past six months are a strong testament to the strength of the Safeguard model in helping create value in our partner companies.

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