Recordati’s Acquisition of Enjaymo®: A Rare Opportunity
Well, hold onto your hats, folks, because it looks like Recordati is buckling up for a serious ride in the rare disease lane. On October 4, 2024, they announced an agreement with Sanofi to snatch up the global rights to Enjaymo® (sutimlimab). This delightfully complex-sounding drug is the only approved treatment for cold agglutinin disease (CAD)—because, apparently, diagnosing rare diseases wasn’t already a game of medical Scrabble!
To break it down for you—Enjaymo® is a humanized monoclonal antibody that swoops in to tackle hemolysis in adults suffering from CAD. The FDA gave it the thumbs up in 2022, and it has also won the hearts of the European Commission and Japan’s Ministry of Health, Labor, and Welfare. So, if you were wondering, yes, this drug now has more international recognition than your ‘Instagram influencer’ neighbor!
Profits: More Than Just a Rare Find!
Now, let’s dive into the meatier part of this announcement: the profitability that’s winking at investors like a saucy barmaid at closing time. Recordati claimed that Enjaymo® generated approximately 100 million euros in the past year, but they’re not stopping there! By 2025, they’re setting their sights on revenues exceeding 150 million euros, and hold onto your bifocals, as they predict an annual sales peak between 250 and 300 million euros. That’s right—double the current levels. It’s about to get serious, folks!
Recordati expects a revenue contribution in 2024, assuming the deal closes when everyone’s calendar reads ‘closing time!’ It’s predicted to be immediately accretive at the EBITDA level, which in finance speak, means they’ll be laughing all the way to the bank—while the bank is wearing a monocle and counting the euros!
Financing 101: How to Spend a Small Fortune!
Now let’s talk about the nitty-gritty of financing this little venture. Recordati plans to shell out a whopping 825 million US dollars upfront and an additional potential 250 million based on commercial milestones—basically, if the sales numbers go through the roof or at least out the window. This deal is expected to close by the end of 2024, looming just ahead like a doctor’s appointment you’ve been avoiding.
They are financing this acquisition with existing liquidity (or fancy stockpiles of cash, as I like to call it) and new bank loans. To keep it juicy, they anticipate their net debt will sit at around 2.4 to 2.5 times EBITDA at the end of 2024, before magically disappearing below 2.0 times by the end of 2025. It’s like an illusionist pulling off the classic ‘now you see it, now you don’t!’ trick!
Grand Plans: A Strategy with Rare Gusto
Rob Koremans, the shining CEO of Recordati, emphasized that this acquisition perfectly aligns with their strategy. He said it reaffirms their commitment to the rare disease segment—because evidently, tackling common diseases just isn’t sexy enough anymore! Enjaymo® not only broadens their portfolio but also complements their oncology delights—like Sylvant®—and expands their clout in key markets like the US, Japan, and Europe.
In summary, with Enjaymo® on board, Recordati isn’t just solving a medical dilemma—oh no, they’re also planning on raking in profits while doing so! If you were a patient suffering from CAD, you’d probably like to think of this as your “knight in shining armor” moment, minus the horse and the dramatic sword fights—though I wouldn’t be opposed to the occasional joust for effect.
So, keep your ears to the ground and your eyes on your inbox for more exciting updates, like your favorite sitcom returning from the dead, because this acquisition surely marks the beginning of a new era in rare disease pharmaceuticals!
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Recordati announced on 4 October 2024 an agreement with Sanofi for the acquisition of the global rights to Enjaymo® (sutimlimab), a cutting-edge biological therapy that stands as the sole approved targeted treatment for cold agglutinin disease (CAD), a rare and often debilitating lymphoproliferative disorder impacting B cells. As stated by Recordati, “Enjaymo® (sutimlimab) is a humanized monoclonal antibody specifically indicated for managing hemolysis in adults diagnosed with CAD. This innovative drug garnered approval from the U.S. Food and Drug Administration (FDA), the European Commission (EC), as well as the Japanese Ministry of Health, Labor and Welfare in 2022. Administered as a chronic intravenous therapy, Enjaymo® effectively meets a crucial unmet medical need for patients suffering from CAD, improving quality of life and addressing critical health concerns.”
Profitability higher than the current average of the rare diseases segment
As for the financial results, Recordati highlighted that **Enjaymo® generated substantial revenues of approximately 100 million euros in the twelve-month period leading up to August 2024 and is projected to surpass 150 million euros in revenues by 2025. Moreover, analysts anticipate potential peak annual sales reaching between 250-300 million euros, more than double the current revenues within this niche market. Subject to the successful closing of the transaction, Recordati expects a significant revenue contribution as early as 2024. Importantly, the transaction is forecasted to deliver immediate accretive benefits at the EBITDA level, with profitability expected to exceed the current average for the rare disease segment starting in 2025.”
Operation financed with existing liquidity and bank financing
With reference to the details of the agreement, “Recordati will execute an up-front payment of US$ 825 million, alongside additional payments linked to commercial milestones that could amount to US$ 250 million if net revenues achieve specified targets that align with peak sales expectations. The transaction is anticipated to finalize by the end of 2024, pending necessary regulatory approvals. Thus, “the operation will be financed through a combination of existing liquidity and newly arranged bank loans. The net debt is projected to approximate 2.4 – 2.5x EBITDA (pro forma) by the conclusion of 2024, subsequently decreasing to below 2.0x EBITDA by the end of 2025 if there are no additional business development actions. Importantly, the Group’s dividend and capital allocation policy will remain unchanged.”
Operation consistent with the Recordati strategy
Rob Koremans, CEO of Recordati, underlined that “this operation is perfectly aligned with our strategic vision, reinforcing our commitment to the rare disease segment and complementing our existing oncology portfolio, particularly in relation to Sylvant®. Enjaymo® significantly enhances our presence in the rare disease sector across the United States, Japan, and Europe, and is poised to positively influence both our revenues and earnings. Above all, considering its robust clinical profile and status as the only product authorized for treating CAD, Enjaymo® effectively addresses a pressing unmet medical need for patients who endure this challenging disease.”
### Interview with Rob Koremans, CEO of Recordati
**Interviewer:** Thank you for joining us today, Rob. Recordati’s recent acquisition of Enjaymo® from Sanofi is making headlines. Can you tell us what motivated this acquisition?
**Rob Koremans:** Absolutely. The acquisition of Enjaymo® aligns perfectly with our strategic focus on rare diseases. Enjaymo® is a groundbreaking treatment for cold agglutinin disease (CAD), an area that has lacked effective therapies until now. By adding Enjaymo® to our portfolio, we’re not just expanding our business— we’re addressing a significant unmet medical need for patients affected by this serious condition.
**Interviewer:** You mentioned the unmet medical need. How does Enjaymo® actually work for patients with CAD?
**Rob Koremans:** Enjaymo® is a humanized monoclonal antibody that targets hemolysis in adults with CAD. It works by interfering with the autoimmune component of the disease, effectively reducing the destruction of red blood cells and improving patients’ quality of life. The FDA and other regulatory bodies recognized its potential, granting approval in 2022, which highlights its importance in the treatment landscape.
**Interviewer:** Financially, this acquisition is quite substantial—at $825 million upfront. How do you plan to manage the financial aspects of this deal?
**Rob Koremans:** It’s a significant investment, but one we believe is worth it. We’re financing the acquisition through a mix of existing liquidity and new bank loans. While we’ll see a net debt increase initially, we forecast reducing that to below 2.0 times EBITDA by the end of 2025, thanks to Enjaymo®’s expected revenue contribution, which we project will be immediate and substantial.
**Interviewer:** You’ve set ambitious revenue targets for Enjaymo®. Can you elaborate on your expectations moving forward?
**Rob Koremans:** In the twelve months leading up to August 2024, Enjaymo® generated approximately 100 million euros in revenue. We’re setting our sights to exceed 150 million euros by 2025, with potential peak sales predictions between 250 to 300 million euros annually. This growth will not only enhance our portfolio but also strengthen our presence in key markets, such as the US, Japan, and Europe.
**Interviewer:** It sounds like you have high hopes for the future. How does this acquisition fit into Recordati’s broader strategic vision?
**Rob Koremans:** This acquisition reaffirms our commitment to rare diseases and complements our existing products, like Sylvant®. In addition to diversifying our product offerings, it enhances our market clout, allowing us to provide better healthcare solutions for patients while delivering strong financial returns to our stakeholders. Essentially, with Enjaymo®, we’re not merely engaging with a market— we’re pioneering a new era in rare disease pharmaceuticals.
**Interviewer:** Thank you, Rob. It’s an exciting time for Recordati and, more importantly, for patients dealing with CAD. We look forward to seeing how Enjaymo® impacts the treatment landscape!
**Rob Koremans:** Thank you for having me! We’re excited too, and we’re dedicated to making a difference for patients and their families.
*Stay tuned for more updates on Recordati’s bold steps in the realm of rare diseases!*
