Biotest AG — M&A Activity 2007

Sep 11, 2007

News Details

Corporate | 11 September 2007 08:44

Biotest AG:Biotest AG acquires plasma protein business unit from Nabi Biopharmaceuticals Corp.

Biotest AG / Acquisition/Capital Increase

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Biotest AG acquires plasma protein business unit from Nabi

Biopharmaceuticals Corp.

· Acquisition of FDA-certified pharmaceutical production facilities and

nine plasmapheresis centres

· Immediate strong presence in the USA with hyperimmunoglobulins and plasma

raw material

· Strong sales and earnings growth expected in the medium term based on new

market approvals of immunoglobulins

· Financing through long-term bank loan – capital increase for part funding

of the purchase price planned

Dreieich, 11 September 2007. Biotest AG, Dreieich has acquired the

Biologics business unit (‘Nabi Biologics’) from Nabi Biopharmaceuticals

Corp., Boca Raton (Florida, USA) in which the company’s plasma protein

operations are pooled. The purchase price stands at USD 185 million

(approximately EUR 135 million). The transaction is still subject to merger

approval and must also be agreed by the shareholders of Nabi

Biopharmaceuticals.

The investment acquired under an asset deal comprises a state-of-the-art

plasma protein production plant certified by the US Food and Drug

Administration (FDA) as well as the unit’s headquarters in Boca Raton. The

transaction also includes the acquisition of nine plasmapheresis centres

certified by FDA and EMEA in six US states with a production volume of

around 400,000 litres per year. At more than USD 80 million in 2007, total

sales from the profitable business unit comprise plasma sales and Nabi-HB®

product sales. Nabi-HB® is a human polyclonal antibody product indicated

to prevent hepatitis B infection following accidental exposure to hepatitis

B virus and is also used to prevent reinfection after liver transplantions

The transaction not only places Biotest among the most important plasma

producers worldwide, but it also secures an outstanding global position in

the hyperimmunoglobulin market. In addition, Biotest has gained a presence

in the US immunoglobulin market considerably earlier than planned. With an

annual demand of more than 30 tons, this market represents around one third

of global demand. Moreover, Biotest is able to cover a major proportion of

its plasma requirements using its own plasma centres.

Professor Dr. Gregor Schulz, Chairman of the Management Board of Biotest AG

commented: ‘With the acquisition of Nabi Biologics, we have found the ideal

complement for our European plasma protein business and have become a

global player in the industry. We have an immediate share in the highly

attractive and growing US plasma protein market and are substantially

expanding our capacities, extending our product range and consolidating our

clinical development portfolio.’ Dr. Leslie Hudson, Interim President of

Nabi Biopharmaceuticals Corp., added: ‘This agreement definitively puts us

on the final path to a successful outcome of our strategic alternatives

process and speaks to the attractiveness of the Nabi Biologics business.

We feel this transaction not only will realize value for our Nabi

shareholders but also will allow us to build on the promise of our

pharmaceutical pipeline. I am delighted that after the transaction closes

our Nabi Biologics and Corporate Shared Services employees will have the

prospect of a promising future with Biotest.’

In addition to the quality and capacity offered by the production

facilities and the proven expertise in the areas of production, quality

assurance and marketing, the determining factors for the acquisition also

included Nabi Biologics’ promising clinical development projects. A

polyvalent immunoglobulin, in particular, displays outstanding product

characteristics similar to those of Intratect® by Biotest and has recently

entered a Phase III registration trial. Tailored to the US market, this

product is to be launched here in the first half of 2010, which is

considerably earlier than the launch date previously planned for

Intratect®. Besides time advantages, Biotest will also benefit in terms of

cost, since the Group is no longer required to invest in the additional

expansion of the German production facilities which would otherwise have

been required.

Another product in clinical development (clinical Phase IIb) is Civacir®, a

polyvalent immunoglobulin containing antibodies that are neutralising the

hepatitis C virus (HCV). It could be used to prevent re-infection in HCV

positive liver transplant patients. According to the World Health

Organisation (WHO), 170 million people worldwide are chronically affected

with HVC because there is no vaccination available. In the USA,

approximately one third of liver transplants are carried out as a result of

this infection. Due to the high unmet medical need, in the US alone

Civacir® has a market potential of somewhere in the three figure million

dollar range. The drug candidate has been granted Orphan Drug Designation

in Europe and the USA which comprises accelerated approval.

Biotest aims to achieve consolidated sales of at least EUR 380 million for

2008. In the medium term, based on the expected product approval of IVIG in

the USA as well as the expanded capacities in Dreieich, sales for the Group

are set to exceed the EUR 500 million mark.

Financing of the transaction, including repayment of all liabilities due to

banks owed by Biotest AG, is secured by a long-term loan issued by

Commerzbank AG. Deutsche Bank advised Biotest on matters relating to the

transaction. Biotest anticipates that the new US operations will generate

operating income in 2008, which almost matches the additional interest

expenses volume. We therefore aim to achieve a further increase in the

Group result before tax in 2008. For the current year, Biotest still

expects to record an increase in earnings within the previously announced

range. From 2010 onwards, the US plasma protein business is set to

significantly increase sales and margin quality following the expected

approval of IVIG, and thus contribute to a notably improved Group result.

Biotest AG plans to fund part of the purchase price financing through a

capital increase. Sufficient authorised capital has been made available for

this. The exact conditions of the capital increase will be announced at a

later date. Biotest will therefore continue to maintain its equity-based

financing practice in the accelerated growth stage which now lies ahead.

For additional information please visit our website www.biotest.de.

Disclaimer

This document contains forward-looking statements on overall economic

development as well as on the business, earnings, financial and asset

situation of Biotest AG and its subsidiaries. These statements are based on

current plans, estimates, forecasts and expectations of the company and are

thus subject to risks and elements of uncertainty that could result in

deviation of actual developments from expected developments. The

forward-looking statements are only valid at the time of publication.

Biotest does not intend to update the forward-looking statements and

assumes no obligation to do so. This press release may not be distributed

in or into the United States, Australia, Canada or Japan.

About Biotest

Biotest AG, Dreieich, Germany, is a company that researches and

manufactures pharmaceutical, biotherapeutic and diagnostic products and has

specialised in immunology and haematology. In its Pharmaceutical segment,

Biotest develops and markets immunoglobulins, clotting factors and albumins

based on human blood plasma. These are used for diseases of the immune

system or haematopoietic system. In the Biotherapeutic segment, Biotest

researches in the clinical development of monoclonal antibodies, including

in the indications of rheumatoid arthritis and blood cancer. The Diagnostic

segment spans reagents and serology and microbiology systems which are

used, for example, in blood transfusions. Biotest has around 1,200

employees worldwide and its shares are listed in the Frankfurt Stock

Exchange’s Prime Standard.

About Nabi Biopharmaceuticals

Nabi Biopharmaceuticals leverages its experience and knowledge in powering

the immune system to develop and, in certain areas, market products that

target serious medical conditions in the areas of hepatitis and

transplants, gram positive bacterial infections and nicotine addiction. We

are a vertically integrated company with sales of antibodies and other

biologics, including Nabi-HB® [Hepatitis B Immune Globulin (Human)], a

pipeline of products in various stages of development, state-of-the-art

manufacturing capability and a cash position that will allow us to advance

our near-term pipeline products. The company operates through two strategic

business units: Nabi Biologics and Nabi Pharmaceuticals. Nabi Biologics has

responsibility for the company’s protein and immunological products and

development pipeline, including Nabi-HB. Nabi Pharmaceuticals is

responsible for the NicVAX® (Nicotine Conjugate Vaccine) and StaphVAX®

(Staphylococcus aureus Polysaccharide Conjugate Vaccine) development

programs. For a complete list of pipeline products, please go to:

http://www.nabi.com/pipeline/index.php. The company is headquartered in

Boca Raton, Florida. For additional information about Nabi

Biopharmaceuticals, please visit our Web site:http://www.nabi.com.

Biotest AG:

Biotest AG, Landsteinerstr. 5, D-63303 Dreieich, www.biotest.de

Dr. Marion Wendorff, Tel: +49 (0) 6103 801-520, e-mail:

marion_wendorff@biotest.de

Fax: +49 (0) 6103 801-347

WKN, ISIN ordinary share: 522720, DE0005227201

WKN, ISIN preference share: 522723, DE0005227235

Listed: Prime Standard/official trading

Frankfurt, Berlin, Düsseldorf, Hamburg, Stuttgart

11.09.2007 Financial News transmitted by DGAP

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Language: English

Issuer: Biotest AG

          Landsteinerstr. 5

          63303 Dreieich

          Deutschland

Phone: +49 – 6103 / 801 – 0

Fax: +49 – 6103 / 801 – 150

E-mail: mail@biotest.de

Internet: www.biotest.de

ISIN: DE0005227201, DE0005227235

WKN: 522720, 522723

Indices:

Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in

          Berlin, Düsseldorf, Hamburg, Stuttgart

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