Sucampo Pharmaceuticals acquires SAG

Sucampo Pharmaceuticals, Inc., or SPI, a biopharmaceutical company, has announced the acquisition of Sucampo AG, or SAG, a patent-holding company and its wholly-owned subsidiary, Sucampo AG Japan, or SAGJ. The acquisition enables SPI to secure control and ownership of the patents and other intellectual property underlying SPI's current and future prostone products including Amitiza, cobiprostone, SPI-017, and other compounds. It also eliminates future royalty and milestone payment obligations to third-party companies outside of SPI and its wholly-owned subsidiaries, and removes certain mandatory funding requirements for the development of early-stage compounds that would otherwise be needed to maintain rights to the promising drug candidates generated by the prostone technology platform. The total purchase price is $80.0 million, consisting of a cash payment of $28.1 million at closing, and a 7-year subordinated unsecured promissory note of $51.9 million. In addition, the purchase price will be increased by an amount equal to 15%, up to a maximum of $40.0 million, of any cash that may be received by SPI in connection with the current arbitration proceedings initiated by SPI against Takeda Pharmaceutical Company Limited. Besides SAG's intellectual property rights, SPI acquires about $26.2 million in net assets at SAG consisting mainly of cash. Net cash out-flow upon signing of the acquisition was therefore $1.9 million and as a result, management does not expect any significant financial impact on SPI's operations or future initiatives. Manatt, Phelps & Phillips, LLP served as special counsel to the Audit Committee and Houlihan Lokey served as financial advisor to the Audit Committee. Anthony Celeste, SPI's lead independent director, said, "In addition to the control and ownership of the intellectual property underlying the company's products and pipeline candidates, the acquisition advances SPI toward its goal of becoming a global, fully integrated biopharmaceutical company, simplifies our company's organization and certain of its operations, and further aligns the interests our company with those of its co-founders and majority shareholders."