Amryt Pharma PLC (LON:AMYT, NASDAQ:AMYT) is to merge with fellow Nasdaq-listed biotech Chiasma Inc (NASDAQ:CHMA) through an all-share deal that will create a leading specialist in rare and orphan diseases.
Chiasma’s lead product is Mycapssa, the only orally-taken treatment approved in the US for the growth hormone imbalance condition acromegaly.
On completion, Amryt shareholders will own 60% of the enlarged company, which will then be based around three approved products – Mycapssa, Metreleptin and Lomitapide.
Joe Wiley, Amryt’s chief executive and who will head the enlarged business, said there are still significant revenue growth opportunities for Mycapssa in acromegaly but also additional and potentially larger targets in patients with carcinoid symptoms stemming from neuroendocrinetumor (NET).
Acromegaly is an estimated US$800ln global market while NET is US$1.9bn and has a confirmed regulatory pathway in the US.
The deal is expected to earnings [EBITDA] accretive and cash generative in the first full calendar year and ‘substantially accretive thereafter’ Wiley said, while also opening the way for US$1bn of revenues at the combined group.
Expected cost savings from the merger are estimated at US$50mln a year.
Separately, Amryt said it was increasing its own revenue guidance for the current year (2021) after a record first quarter.
Sales rose by 8.7% to US$48.4mln helped by good sales of both Metreleptin and Lomitapide.
As a result, Amryt now predicts revenues this year will be between US$205-210mln, excluding any contribution from Chiasma, which represents growth of between 12% -15% on 2020.