Proposed Acquisition of Tetris Pharma Ltd to add key commercial diabetes product and build out Arecor’s specialty hospital products franchise with scalable sales, marketing and distribution platform.
Arecor Therapeutics, a globally focused biopharmaceutical company advancing today’s therapies to enable healthier lives, announced that it has entered into a conditional agreement to acquire the entire issued share capital of Tetris Pharma Ltd. Tetris Pharma is a commercial stage speciality pharmaceutical company with a sales and distribution team and a platform focused on injectable speciality products across the UK and Europe. The Directors believe that the acquisition adds a key commercial diabetes product to Arecor’s portfolio, as well as complementing Arecor’s existing specialty hospital products franchise, offering the potential to accelerate significant revenue growth for Arecor.
Sarah Howell, CEO of Arecor Therapeutics commented:
“The Board of Arecor believe that the acquisition of Tetris Pharma is a compelling opportunity to accelerate Arecor’s commercially-driven strategy alongside our core diabetes and partnered products businesses. We will gain an existing, revenue-generating, sales, marketing and distribution platform which we believe is highly complementary to our existing specialty hospitals products business and has significant growth potential. The lead product, Ogluo®, meets a key patient need for people living with diabetes at risk of severe hypoglycaemia, which is a therapeutic area that we understand well, giving us confidence in its prospects and our ability to deliver. In addition, the platform would add future optionality to our specialty products franchise by providing the capability to take selected products to market in the UK and Europe where appropriate in addition to our already proven partnering strategy.”
The Directors believe that the Acquisition offers the potential to significantly accelerate Arecor’s revenue growth. Tetris Pharma has an exclusive supply agreement and licence to sell the first stable liquid ready-to-use glucagon auto-injector pen, Ogluo®, within the EEA, UK and Switzerland. Ogluo® is a proprietary ready-to-use glucagon indicated to treat severe hypoglycaemia, a potentially life-threatening condition, in people with diabetes. Tetris Pharma is targeting a significant market share within an existing c.£100 million+ market across the licensed territory. Ogluo® was launched by Tetris Pharma in the UK earlier this year and launches across key European territories are planned over the next 12 to 24 months.
The Directors believe the Acquisition will help realise Arecor’s vision of becoming a significant self-sustaining biopharmaceutical business by providing:
1) Addition of a key proprietary diabetes specialty product aligned to Arecor’s vision
- Transforming patient care by enhancing existing therapeutic medicines so that they are safer, more effective and easier-to-use
- Ogluo® is an important and proprietary product, patent protected until at least 2035, with real medical need
- Ogluo® is the first ready-to-use liquid stable glucagon for the treatment of severe hypoglycaemia, a potentially life-threatening condition that requires safe, fast and effective treatment
2) Strategic fit and the provision of partnership optionality across Arecor’s proprietary specialty hospital franchise
- The Tetris Pharma sales and distribution platform provides Arecor with optionality on partnering structures to realise full value of Arecor’s proprietary specialty hospital products
- Future potential to take selected niche specialty hospital products to market in the UK and Europe
4) Complementary team skills and expertise
- Opportunity to enhance specialty therapeutic knowledge across product development and commercialisation life-cycle
- Enhance interactions with diabetes key opinion leaders, patient groups and payers for the benefit of both Ogluo® and Arecor’s lead proprietary diabetes development products, AT247 and AT278
5) Anticipated positive cashflow contribution from Tetris Pharma with Tetris Pharma expected to break even within c. 3 years from completion of the Acquisition
- Tetris Pharma generated initial revenues of c. £600,000 (unaudited) in the six months to 30 June 2022. The Directors believe that there is potential for significant revenue growth as Ogluo® roll-out progresses
- Expected future cash contribution to Arecor Therapeutics which can be utilised to increase/accelerate value enhancing proprietary product development
There is no change of strategy in relation to Arecor’s lead diabetes products AT247 and AT278, where Arecor intends to generate additional clinical data to further demonstrate the superiority of these products compared with gold standard insulins available to patients today, and to position these products for partnering under Arecor’s existing licensing model.
Tetris Pharma highlights
- Tetris Pharma is a revenue-generating, commercial stage pharmaceutical company established in April 2020 to develop a platform focused on niche speciality pharma injectable products across the UK and Europe targeting currently underserved patient needs. The business model is to license rights to sell and distribute specialty products from pharmaceutical companies by providing a platform to access the UK and European markets.
- Tetris Pharma’s lead product – Ogluo® – is approved in the UK and EEA for the treatment of severe hypoglycaemia in patients with Type 1 and Type 2 diabetes, a serious emergency condition which left untreated may cause seizure, coma and even death.
- Ogluo® is an important and proprietary product with real medical need providing the first stable liquid ready-to-use glucagon in an easy-to-use auto-injector pen as an emergency treatment for severe hypoglycaemia. With Arecor’s deep understanding of the diabetes market, the Directors believe the simple two step administration of Ogluo® offers a strong patient benefit and competitive advantage over the standard of care and, as such, has the potential to capture significant share within a c.£100 million+ market across Europe and the UK.
- Tetris Pharma has, conditional on, inter alia, completion of the Acquisition, entered into an amended exclusive 16-year minimum term licence and supply agreement with Xeris Pharmaceuticals, Inc. (“Xeris“) for the sale and distribution of Ogluo® in the EEA, UK and Switzerland. Ogluo® is sold by Xeris under the registered name Gvoke® in the US.
- Since launch in Q4 2019, Gvoke® has demonstrated a quarter-on–quarter growth in the number of prescriptions in the US, with c. 88 per cent. growth from Q1 2021 to Q1 2022, demonstrating patient and prescriber demand for this product which is also expected to translate to the UK and European markets.
- Ogluo® was made available in the UK in December 2021.
- Total sales by Tetris Pharma (unaudited) in the six months to 30 June 2022 were c.£600,000.
The Acquisition is conditional upon Admission of the Initial Consideration Shares and the Placing Shares.