Recro Announces Entry Into Letter of Intent for Acquisition of a Full Service CDMO
August 10 2021 - 7:00AM
Recro Pharma, Inc. (“Recro”; NASDAQ: REPH), a contract development
and manufacturing organization (CDMO) dedicated to solving complex
formulation and manufacturing challenges for companies developing
oral solid dose drug products, today announced that it has signed a
non-binding letter of intent (“the LOI”) for its acquisition of a
full service CDMO with capabilities that range from formulation
development to commercial manufacturing for various dosage forms
including oral liquids, sterile injectables, tablets, topicals,
liquid/powder filled capsules, ophthalmic droppers, liposomes and
nano/microparticles (the “Target”).
Pursuant to the LOI, Recro agreed to acquire
100% of the equity interests of the Target in exchange for
consideration having an aggregate value of approximately $49.850
million, assuming a cash free, debt free balance sheet and that the
Target has, at closing, an adequate level of working capital
(excluding cash) to support the operations of its business
post-closing. The purchase price will be paid through: (i) $25.5
million of cash at closing; (ii) 9,302,718 shares of common stock
of Recro to be issued to Target in six months; and (iii) seller
notes of $6.1 million. The seller notes will have a three (3) year
maturity date from the date of closing and bear interest at a rate
of 6% annually. The seller notes will be expressly subordinated and
unsecured in right of payment and priority to Recro’s existing debt
with Athyrium Capital Management.
“We are excited about this potential transaction and look
forward to closing and sharing more details in the near term,” said
David Enloe, president and chief executive officer of Recro.
Completion of the transaction is subject to
finalization of due diligence investigations by the relevant
parties, the negotiation and execution of definitive transaction
agreements and other customary closing conditions. There can be no
assurance that a definitive agreement will be entered into or that
the proposed transaction will be consummated. Further, readers
are cautioned that those portions of the LOI that describe the
proposed transaction, including the consideration to be issued
therein, are non-binding.
About RecroRecro (NASDAQ: REPH)
is a contract development and manufacturing organization (CDMO)
with capabilities from early feasibility to commercial
manufacturing. With an expertise in solving complex manufacturing
problems, Recro is a CDMO providing oral solid dosage form
development, end-to-end regulatory support, clinical and commercial
manufacturing, and packaging and logistics services to the global
pharmaceutical market.
In addition to our experience in handling DEA
controlled substances and developing and manufacturing modified
release oral solid dosage forms, Recro has the expertise to deliver
on our clients’ pharmaceutical development and manufacturing
projects, regardless of complexity level. We do all of this in our
best-in-class facilities, which total 120,000 square feet, in
Gainesville, Georgia.
For more information about Recro’s CDMO
solutions, visit recrocdmo.com.
Forward-Looking StatementsThis
press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. These statements, among
other things, the Company’s expectations regarding the potential
acquisition of the Target, the potential benefits of the
acquisition of the Target, the proposed terms and conditions of a
definitive agreement with the Target and the receipt of all
necessary approvals and satisfaction of all closing conditions for
completion of the transaction, and other statements. The words
“anticipate”, “believe”, “could”, “estimate”, “upcoming”, “expect”,
“intend”, “may”, “plan”, “predict”, “project”, “will” and similar
terms and phrases may be used to identify forward-looking
statements in this press release. Factors that could cause the
company’s actual outcomes to differ materially from those expressed
in or underlying these forward-looking statements include risks
that the proposed transaction may not occur on the terms described
in this press release or at all; if the proposed transaction
completes, the results and potential of the combined business and
the combination of Target’s business with the Company’s business
may not be as anticipated; the ongoing economic and social
consequences of the COVID-19 pandemic, including any adverse impact
on the customer ordering patterns or inventory rebalancing or
disruption in raw materials or supply chain; demand for the
company’s services, which depends in part on customers’ research
and development and the clinical plans and market success of their
products; customers’ changing inventory requirements and
manufacturing plans; customers and prospective customers decisions
to move forward with the company’s manufacturing services; the
average profitability, or mix, of the products the company
manufactures; the company’s ability to enhance existing or
introduce new services in a timely manner; fluctuations in the
costs, availability, and suitability of the components of the
products the company manufactures, including active pharmaceutical
ingredients, excipients, purchased components and raw materials, or
the company’s customers facing increasing or new competition. These
forward-looking statements should be considered together with the
risks and uncertainties that may affect our business and future
results presented herein along with those risks and uncertainties
discussed in our filings with the Securities and Exchange
Commission at www.sec.gov. These forward-looking statements are
based on information currently available to us, and we assume no
obligation to update any forward-looking statements except as
required by applicable law.
Contacts:
Stephanie Diaz (Investors)
Vida Strategic Partners
415-675-7401
sdiaz@vidasp.com
Tim Brons (Media)
Vida Strategic Partners
415-675-7402
tbrons@vidasp.com
Ryan D. Lake (CFO)
Recro
770-531-8365
ryan.lake@recroCDMO.com
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