In a market where multibillion-dollar deals have become somewhat rare, Paul, Hastings, Janofsky & Walker partner Tinley Anderson in Atlanta spent the past three months working on such a deal. Sciele Pharma Inc. tapped Anderson for legal counsel on its acquisition agreement with a Japanese drugmaker.
Shionogi & Co. annou
nced today that it agreed to acquire Sciele for $1.42 billion. The price includes a cash tender offer totaling $1.1 billion and $325 million to redeem a bond convertible into shares of Sciele.
Sciele, of Atlanta, markets drugs made by third parties, including the Allegra antihistamine drug and women’s health products such as Prenate-brand prenatal vitamins. Shionogi, headquartered in Osaka, makes the Crestor cholesterol drug and owns the Japanese marketing rights to OxyContin and Claritin.
Shionogi was interested in Sciele because Shionogi has only a minor presence in the U.S., and Sciele does most of its business here, Anderson said.
“One of the best ways to break into a new market is to purchase someone with a tried and true sales force,” Anderson said.
More than 80 percent of Sciele’s employees are sales representatives, according to a regulatory filing. Sciele’s three largest customers are national drug wholesale companies—AmerisourceBergen Corp., Cardinal Health Inc. and McKesson Corp.
Sciele has its own research department and submits products for U.S. Food and Drug Administration approval. But Sciele primarily is involved in the acquisition of licenses of other companies’ products. Paul Hastings has negotiated all of these licensing and marketing agreements on behalf of Sciele, Anderson said. These include pacts with many of the big players in the global pharmaceutical industry, such as AstraZeneca, Bayer Healthcare, Pfizer and Wyeth.
Sciele is able to handle most of the intellectual property legal work on these licensing, marketing and distribution agreements in-house, because Sciele General Counsel Leslie B. Zacks is an IP lawyer, Anderson said. Anderson and Zacks are both former partners at Hunton & Williams’ Atlanta office.
Paul Hastings has also done corporate and securities work for Sciele since 2003, including a $325 million convertible debt offering, and Sciele’s $110 million acquisition of Alliant Pharmaceuticals Inc. in June 2007.
Paul Hastings partner Elizabeth Noe advised Sciele on securities matters in the Shionogi transaction, and associates Michael Greene and Clare Arguedas worked with Anderson. Davis Polk & Wardwell advised Shionogi.
The transaction does not require approval from the U.S. Food and Drug Administration, Anderson said.