View from Dublin: watching what Mulligan does
SEAMUS Mulligan must now be the hottest investment property in pharma. The Waterford-born former Elan executive has co-founded two pharma businesses in the last 13 years. After seven years the first sold for $500m and then six years after start-up, the second has just sold for $735m.
Mulligan and his co-founders at Adapt Pharma have surprised many with the scale and speed with which they built a business that is being bought for a valuation of close to three-quarters of a billion dollars.
Mulligan owns around 75% of the business, which he took a punt on just six years ago, and he stands to receive $550m if performance targets are met. His initial cash receipt for his shares is a massive $431m.
Adapt has developed a spray treatment which can be applied in overdose cases of opioids, such as heroine, fentanyl or prescription opioid-based painkillers.
The buyer, Emergent Biosolutions, is really betting big with this acquisition. Emergent’s market cap is just $3.1bn and it expects to make about $100m in profits this year. So forking out this kind of money, including $575m in cash up front, is not exactly small change for the buyer.
Emergent specialises in medicines and device to tackle all kinds of emergencies with half of its sales coming from a range of vaccine, capsule and intravenous products it has for Anthrax.
Companies Registration Office filings show that as of September 2017, Adapt has assets on its balance sheet of $114.9m and liabilities of just $200,000.
Mulligan of course has done this before having bagged hundreds of millions in an all-share deal when he sold Azur Pharma in an all-share deal to Jazz Pharmaceuticals in 2012. Back then he went on to sell off $86m of his Jazz Pharmaceuticals shares to invest in Adapt. This was an enormous investment punt to take and it has now paid off in spades.
He has retained 1.06m shares in Jazz which are currently valued at a further $182m.
Pharma private equity investors will be falling over themselves to try and follow Mulligan in whatever he gets into next.