Sanofi-Aventis shoulders Mannkind out of insulin plant acquisition
This article was originally published in Scrip
Sanofi-Aventis is to exercise its step-in right to acquire an insulin manufacturing plant in Germany for €30 million from Pfizer, disrupting a deal that Mannkind signed to acquire the facility in March.
Mannkind had agreed to buy Pfizer's insulin facility at Industriepark Hoechst in Frankfurt, including equipment, Pfizer's insulin inventory, rights to acquire additional bulk insulin inventory and related technology rights.
However, the transfer of the real property rights to Mannkind required the consent of Infraserv, the operator of Industriepark Hoechst, and the sale was subject to a right of first refusal in favour of Sanofi-Aventis Deutschland, which has now exercised that right.
Mannkind agreed to buy the facility for $33 million (or around €23.7 million); significantly lower than the €30 million that Sanofi-Aventis is to pay. However, Mannkind's payment was subject to a potential increase of $3 million per month if the deal had not closed by April 3rd, which might explain the elevated price that Sanofi-Aventis is now to pay.
There are currently 138 employees at the facility and the number that will be retained by Sanofi-Aventis will depend on the market's demand for products produced there, Geoffroy Bessaud, a spokesperson for Sanofi-Aventis, told Scrip. Mannkind had agreed to retain around 80 of the 148 employees then working at the facility.
The manufacturing plant in Frankfurt is one of the largest facilities of its kind in the world and will be used to increase the production of Sanofi-Aventis's diabetes treatment Lantus (insulin glargine), which had sales of €2.5 billion last year. The company hopes that the facility will help it to double Lantus' sales by 2012, Mr Bessaud added.
Sanofi-Aventis expects the deal to close in the next few weeks.