specialty pharma

Kinderhook Forms Specialty Pharmacy Platform Avita

June 9, 2020 by John McNulty

Kinderhook has acquired Paramount Specialty Pharmacy and PharmBlue Holdings and will combine them with its existing pharmacy companies Long’s Drugs and PharMedQuest. The new merged platform will operate under the name of Avita Pharmacy.

Kinderhook acquired Long’s Drugs and PharMedQuest in November 2019. South Carolina-based Long’s owns and operates over 30 pharmacies in the Southeast under the Avita and Longs brands; and PharMedQuest owns and operates 28 pharmacies across California. The companies’ pharmacies serve indigent and underserved populations including Ryan White Clinics (a Federal program that provides HIV-related health services), federally qualified health centers, and STD clinics.

With the buys of Paramount and PharmBlue – Kinderhook’s 45th and 46th transactions in the healthcare services sector – Avita now provides on-site and central fill pharmacy services through more than 60 pharmacies, with over 250 covered entity relationships that serve more than 120,000 patients. Covered entities (defined under the Health Insurance Portability and Accountability Act (HIPPA)) include insurance companies, health maintenance organizations, government programs, military and veterans’ health programs, healthcare providers and healthcare clearinghouses.

Avita is led by CEO Lorrie Carr and is headquartered in Dallas. PharmBlue is based north of Pittsburgh in Warrendale, Pennsylvania and Paramount is based on Long Island in Melville, New York.

“These strategic transactions will enhance the trajectory of the company, bolstering Avita’s already strong presence in the Southeast and West Coast with new hubs in the Midwest and Northeast,” said Chris Michalik, a managing director of Kinderhook. “We are excited to be a part of this next chapter of growth.”

New York City-based Kinderhook makes control investments in companies with transaction values of $25 million to $150 million in which the firm can achieve financial, operational and growth improvements. The firm makes investments in non-core divisions of public companies, management buyouts of entrepreneurial-owned businesses, troubled situations, and existing small-capitalization companies lacking institutional support. Sectors of interest include healthcare services; environmental and business services; and automotive and light manufacturing.

Kirkland & Ellis provided legal services to Kinderhook on this transaction.

Private Equity Professional | June 9, 2020

RoundTable Exits Specialty Pharma Company

March 10, 2015 by John McNulty

RoundTable Healthcare Partners has completed the sale of Tower Holdings – including operating subsidiaries CorePharma, and Amedra Pharmaceuticals – and Lineage Therapeutics to Impax Laboratories for $700 million in cash. This transaction marks the fifth portfolio company sale from RoundTable’s $500 million Fund II and generated a return of more than nine times invested equity capital.

CorePharma – along with its affiliated companies Amedra and Lineage – is a pharmaceutical company focused on the development, manufacture and commercialization of complex branded and generic pharmaceutical products. The companies specialize in high value generic formulations including extended-release, delayed-release and DEA controlled substances and the marketing of niche brands including Albenza, Dexedrine, Daraprim, Adrenaclick epinephrine autoinjector and its authorized generic. CorePharma is headquartered in Middlesex, NJ (www.corepharma.com) and Amedra (www.amedrapharma.com) and Lineage (www.lineagetherapeutics.com) are headquartered in Horsham, PA.

“Tower’s management team – led by Chief Executive Officer, Christopher Worrell – did a tremendous job of growing the company’s revenue and profitability and expanding its product portfolio, while simultaneously solidifying its manufacturing, quality and regulatory operations,” said Jack McGinley, a Founding Partner of RoundTable and Chairman of the Boards of Tower and Lineage. “We believe that Impax will be an excellent strategic partner to help the companies achieve their next phase of growth.”

Impax is a specialty pharmaceutical company focused on the development of complex, high-value generics, and branded products that target central nervous system disorders and other select specialty segments. The company is headquartered in Hayward, CA (www.impaxlabs.com).

RoundTable Healthcare Partners is an operating-oriented private equity firm focused exclusively on the healthcare industry. RoundTable manages $1.9 billion in capital, including three equity funds totaling $1.5 billion and two subordinated debt funds totaling of $400 million. The firm is based in the Chicago suburb of Lake Forest (www.roundtablehp.com).

“RoundTable has been an exceptional partner for Tower and Lineage. They have supported strategic investments across all aspects of our operations and provided significant capital and transaction assistance for strategic acquisitions and product pipeline development,” said Tower CEO Christopher Worrell.

Credit Suisse Securities acted as exclusive financial advisor to Tower Holdings and Lineage Therapeutics and Sidley Austin acted as exclusive legal advisor to RoundTable in this transaction.

Madison Dearborn Exits Ikaria

March 6, 2015 by John McNulty

Specialty biopharmaceutical company Mallinckrodt has agreed to acquire Ikaria, a portfolio company of Madison Dearborn, for $2.3 billion. The transaction is expected to close early in the second quarter of 2015.

Ikaria, acquired by Madison Dearborn in the first quarter of 2014 for $1.6 billion, is a critical care company that develops and commercializes therapies designed to address the needs of critically ill patients. Ikaria’s lead product is INOMAX (nitric oxide) for inhalation, which is the only FDA-approved drug for the treatment of hypoxic respiratory failure associated with pulmonary hypertension in infants born at or near term. Ikaria is headquartered west of New York City in Hampton, NJ, with a research facility in Madison, WI, and manufacturing facilities in Port Allen, LA and Madison, WI (www.ikaria.com).

Luisa Beltran of PEHUB reports the sale of Ikaria will yield a 140 percent IRR for Madison Dearborn Partners after a one-year hold.

Madison Dearborn Partners has more than $18 billion of capital under management. Sectors of interest include basic industries; business and government services; consumer; financial and transaction services; healthcare; and telecom, media and technology services. Madison Dearborn was founded in 1992 and is based in Chicago (www.mdcp.com).

Mallinckrodt (NYSE:MNK) is a specialty biopharmaceutical and medical imaging company. Areas of focus include therapeutic drugs for autoimmune and rare disease specialty areas like neurology, rheumatology, nephrology and pulmonology along with analgesics and central nervous system drugs for prescribing by office- and hospital-based physicians. Mallinckrodt has approximately 5,500 employees based in 65 countries worldwide. The company’s fiscal 2014 revenue totaled $2.5 billion. Mallinckrodt has corporate offices in St. Louis and Dublin (www.mallinckrodt.com).

Mallinckrodt International Finance has entered into debt financing commitments for amounts that, together with cash on hand, will be sufficient to provide funds necessary to acquire Ikaria.

Mallinckrodt’s financial advisor for the transaction is Goldman Sachs, and its legal advisors are Wachtell, Lipton, Rosen & Katz, and Arthur Cox in Ireland. The legal advisor for Ikaria is Kirkland & Ellis.

“At Ikaria our mission has been to address the high unmet needs of critical care medicine,” said Daniel Tasse, Chairman and Chief Executive Officer of Ikaria. We thank Madison Dearborn and our other investors for their partnership and believe Mallinckrodt is the natural owner of Ikaria and can expand further our mission of advancing critical care.”

Three Arch, Petra and New Spring Exit Salveo Specialty Pharmacy

January 27, 2015 by John McNulty

Three Arch Partners, Petra Capital and New Spring Capital have exited their investment in Salveo Specialty Pharmacy through a sale of the company to Catamaran Corporation.

Salveo Specialty Pharmacy, headquartered in Saint Petersburg, was formed by Three Arch, Petra and New Spring in September 2011 to acquire specialty pharmacies serving patients and customers across the country. Salveo’s first acquisition, made simultaneous with its formation, was the buy of Echo Specialty Pharmacy Services, a New York-based metropolitan market pharmacy focused on transplant, oncology, and HIV/AIDS therapies (www.echospecialty.com) (www.salveospecialty.com).

Catamaran Corporation (formerly SXC Health Solutions) is a Schaumburg, IL based pharmacy benefit management company (www.catamaranrx.com) (NASDAQ: CTRX).

Three Arch Partners was formed in 1993 to invest in early-stage healthcare companies. The firm is based near San Jose in Portola Valley, CA (www.threearchpartners.com).

Petra provides subordinated debt and preferred stock to companies for expansion, acquisition, buyout, refinancing or recapitalization. The firm invests up to $20 million in companies that possess a minimum of $10 million in revenue and positive EBITDA at the time of investment. Sectors of interest include business, healthcare and information technology services companies. The firm is based in Nashville (www.petracapital.com).

NewSpring Capital is a provider of private equity capital through a family of funds including NewSpring Ventures, NewSpring Health, and NewSpring Mezzanine. The firm has offices in Radnor, PA; Short Hills, NJ; and Washington, DC (www.newspringcapital.com).

KKR Invests in Arbor Pharmaceuticals

December 5, 2014 by John McNulty

KKR has made a significant minority equity investment in Arbor Pharmaceuticals, a specialty pharmaceutical company.

Arbor Pharmaceuticals markets branded prescription products for the cardiovascular, hospital, and pediatric markets as well as generic products through its Wilshire division. The company has completed over twenty acquisition, licensing, or product development transactions over the past four years and has multiple products filed with the FDA as well as several branded and generic products in late-stage development. Arbor Pharmaceuticals has approximately 400 employees and is headquartered in Atlanta (www.arborpharma.com).

Arbor Pharmaceuticals was acquired by its current investor group in 2010. Investors include Chief Executive Officer Ed Shutter; Signet Healthcare Partners; JW Asset Management, led by Jason Wild, Chairman of the Board of Arbor; and ARCH Healthcare Fund, led by Allen Chao.

“Arbor is led by an accomplished management team with a track record of building and scaling specialty pharmaceutical platforms. We believe that Arbor, with its diversified product portfolio, late-stage development pipeline, and proven business development acumen, is well positioned for continued growth,” said Ali Satvat, Director on KKR’s Health Care investing team.

KKR makes private equity, fixed income and other investments in companies in North America, Europe, Asia and the Middle East. The firm has $90 billion in assets under management. KKR was founded in 1976 and in addition to its New York headquarters the firm has offices in Menlo Park, San Francisco, Houston, Washington DC, London, Paris, Hong Kong, Tokyo, Beijing, Mumbai, Dubai and Sydney (www.kkr.com).

“We are pleased to be adding KKR, with its extensive industry experience, to our shareholder base. We selected KKR based on a number of factors, including compatibility with Arbor and a shared vision for achieving future growth. This is an important next step as we continue building a fully integrated pharmaceutical company focused on products that improve patients’ lives,” said Mr. Wild.

KKR has a history of investing in and growing health care companies, including Alliance Boots, Biomet, Gland Pharma, HCA, Jazz Pharmaceuticals, and PRA Health Sciences. KKR is funding the Arbor investment primarily from its North America XI private equity fund. The transaction is expected to close early in the first quarter of 2015.

Lazard Middle Market is serving as financial advisor to Arbor.

2014 PEPD • Private Equity’s Leading News Magazine • 12-5-14

Avista Acquires Portfolio of Branded Women’s Health Products

March 25, 2014 by John McNulty

Vertical Pharmaceuticals, a portfolio company of Avista Capital Partners (through Vertical/Trigen Holdings) has acquired the rights to three branded women’s health products from Upsher-Smith Laboratories. Avista acquired a majority interest in Vertical/Trigen Holdings in December 2013.

“This is a positive first step in our strategy to expand the Vertical/Trigen platform through add-on acquisitions,” said Brian Markison, Executive Chairman of Vertical/Trigen and Healthcare Industry Executive of Avista. “We will continue to pursue additional opportunities to acquire complementary assets in order to broaden our portfolio of high-quality products and accelerate the company’s growth.”

The acquired products include: Divigel (an estrogen hormone gel) 0.1%; Nexa Plus, a branded line of prenatal vitamins; and Provella, a women’s health focused probiotic dietary supplement. As part of the transaction, Upsher-Smith has transferred the New Drug Application (NDA) for Divigel® to Vertical Pharmaceuticals.

“We are very excited to be expanding our position in the growing field of women’s health,” said Steven Squashic, CEO of Vertical/Trigen. “With these additions to our portfolio, we will be able to drive efficiencies through enhanced scale and further optimize our commercial infrastructure. We are confident that our highly experienced women’s health sales force will enable us to reach more patients and caregivers with these products.”

Vertical/Trigen is a specialty pharmaceutical company engaged in the development, marketing, and distribution of both branded and generic prescription pharmaceuticals in the United States. Vertical, the segment of the company focused on branded pharmaceuticals, specializes in women’s health, pain management, and respiratory and allergy medications. Its brands include OB Complete, Corvite, ConZip, and Lorzone and are marketed by a dedicated national sales force. Trigen, the generic pharmaceutical arm of the company, markets over 70 formulations in the prenatal, hematinic (iron) supplement, and cough/cold remedy markets. The company is based in Sayreville, NJ (www.verticalpharma.com) (www.trigenlab.com).

Avista Capital Partners, with over $6 billion of capital under management, makes control or influential minority investments in growth-oriented energy, healthcare, communications & media, industrials, and consumer businesses. The firm was founded in 2005 and is based in New York with offices in Houston and London (www.avistacap.com).

H.I.G. Growth Invests in Integrity Nutraceuticals

January 28, 2014 by John McNulty

H.I.G. Growth Partners has completed the recapitalization of F.H.G. Corporation (DBA Integrity Nutraceuticals), a contract manufacturer of nutritional supplements.

“Peter Miller and his team have established Integrity as one of the leaders in a rapidly growing and evolving industry,” said Mark Tricolli, a Managing Director with H.I.G. Growth Partners. “We are very excited to be working with the Integrity team, and look forward to further expanding the company’s infrastructure and capabilities to enable it to remain on the cutting edge of product formulation, to continue delivering the highest standards of quality, and to meet ever growing customer demand.”

Integrity is a provider of product formulation, manufacturing and distribution services to nutritional supplement brands. The company identifies, sources and tests each ingredient, develops custom formulations and flavor profiles, and delivers fully packaged products ready for end-user consumption. The company was founded in 2000 and headquartered in Spring Hill, TN (www.integritynutmfg.com).

“We are very excited about this next stage for Integrity. Our partnership with H.I.G. will provide us with the financial and operating resources that will enable us to accelerate growth and more importantly, better serve our customers,” said Peter Miller, CEO of Integrity.

Integrity was represented by Partnership Capital Growth (www.pcg-advisors.com), a boutique investment bank that focuses exclusively on the healthy, active and sustainable living marketplace.

H.I.G. Growth Partners is the growth capital investment affiliate of H.I.G. Capital. H.I.G. Growth Partners makes majority and minority equity investments of $5 million to $30 million in growth-oriented businesses with revenues of $10 million to $100 million. The firm invests across all industries but focuses on certain high-growth sectors where the team has in-house expertise such as healthcare, technology, internet & media, consumer products and technology-enabled financial and business services (www.higgrowth.com).

RoundTable Exits Aqua Pharmaceuticals

January 17, 2014 by John McNulty

RoundTable Healthcare Partners has completed the sale of Aqua Pharmaceuticals to Almirall SA for up to $403 million in cash. The consideration includes $328 million of cash at closing plus up to $75 million of contingent payments. RoundTable acquired a majority interest in Aqua in June 2010.

“Aqua is another example of RoundTable partnering with owner/founders, and working together, taking the business to another level of growth and value,” said Lester Knight, Founding Partner and Co-Chairman of RoundTable. “This transaction marks the third portfolio company sale from RoundTable’s $500 million Fund II, and at closing, generated a return of more than five times invested equity capital for our investors.”

Aqua is a specialty pharmaceutical company focused on acquiring, developing and marketing branded, prescription dermatology products. Aqua promotes five brands throughout the United States including Monodox, an antibiotic used to treat acne; Cordran lotion and cream, a topical corticosteroid used for the relief of inflammatory dermatoses (lesions or eruptions of the skin); Fluoroplex cream, used for the treatment of actinic keratoses (small, rough, raised area found on areas of your skin that have often been exposed to the sun for a long period of time); Xolegel Gel, used for the treatment of seborrheic dermatitis (a common, inflammatory skin condition); and Verdeso Foam, used to treat steroid responsive dermatoses. Aqua was co-founded in 2004 by Craig Ballaron and Jay Gooding and is headquartered in West Chester, PA (www.aquapharm.com).

“RoundTable has been an important partner to Aqua since 2010,” said Craig Ballaron, Co-founder and Chief Executive Officer of Aqua. “During our partnership, they supported our efforts to expand our senior management team and salesforce, accelerate investment in our R&D pipeline and support several important product acquisitions. RoundTable has been an ideal partner for Aqua during this important growth phase.”

The buyer of Aqua, Almirall, is a global pharmaceutical company that provides products focused on the treatment of respiratory, dermatological, gastrointestinal and pain diseases. The company is headquartered in Barcelona, Spain (www.almirall.com).

“The Aqua management team, led by Co-Founder and CEO Craig Ballaron, has created an industry-leading specialty dermatology pharmaceutical company, achieving exceptional growth through its strong sales organization and strategic product acquisitions while making significant R&D investments,” said Jack McGinley, Founding Partner of RoundTable and Chairman of Aqua. “We believe that Almirall will be a strong strategic partner for Aqua, its employees and customers going forward.”

Deutsche Bank Securities acted as exclusive financial advisor to Aqua, and Sidley Austin acted as the exclusive legal advisor to RoundTable on this transaction.

BelHealth Acquires Special Design Health Care

December 17, 2013 by John McNulty

Town Total Health, a specialty pharmacy and a portfolio company of BelHealth Investment Partners, has completed the acquisition of Special Design Health Care, a specialty pharmacy.

Special Design Health Care is an independent specialty pharmacy serving gastroenterologists and hepatologists and their patients in more than 20 states. The company was founded in 1989 and is based in Cape Girardeau, MO (www.specialdesignhealthcare.com).

Town Total, acquired by BelHealth in December 2012, is a specialty pharmacy servicing patients with various chronic diseases and complex medical conditions including: Hepatitis C, HIV, chronic inflammatory diseases, oncology and transplant maintenance therapy. The company provides a range of specialty services for patients, providers, payors and pharmaceutical companies including reimbursement assistance, patient education, clinical adherence programs and prompt delivery of critical medications. The company is based in Melville, NY (www.towntotal.com).

According to BelHealth, Town Total in combination with Special Design is at the forefront of the evolving Hepatitis C market and is well positioned as a full service specialty pharmacy servicing patients from New York to Colorado.

Joy Doll, R.N., formerly a Director at Special Design, has become Senior Vice President and leads Town Total’s Hepatitis C business unit. In addition to Ms. Doll, her sales and operational team will expand Town Total’s sales and clinical staff plus add a nursing capability to offer even greater patient support and improved outcomes.

“Special Design is the perfect addition to Town Total, expanding our geographic coverage and expanding our service offering more deeply into Hepatitis C and inflammatory conditions such as RA, Crohns and psoriasis. Additionally, we are thrilled to have Joy Doll join the team and lead our effort in what is becoming a highly dynamic Hepatitis C market,” said Michael Nameth, CEO of Town Total.

BelHealth Investment Partners is a healthcare private equity firm focused on lower middle market companies. The firm invests from $10 million to $25 million in companies in three healthcare segments: services, information technology, and products & distribution. BelHealth is based in New York (www.belhealth.com).

“Following the recent launch of two highly anticipated Hepatitis C drugs by Gilead and Janssen (Sovaldi and Olysio), we are pleased to increase our investment into the specialty pharmacy industry and expand Town Total’s Hepatitis C business and our national footprint. Special Design perfectly fits both of these objectives,” said Harold Blue, BelHealth’s Managing Partner.

Avista Acquires Vertical Pharmaceuticals and Trigen Laboratories

December 17, 2013 by John McNulty

Avista Capital Partners has acquired a majority interest in Vertical/Trigen Holdings, the owner of Vertical Pharmaceuticals and Trigen Laboratories. Avista is partnering with co-founders Steven Squashic, Kevin Hudy, and David Purdy, who will remain in place and retain a significant minority ownership stake in Vertical/Trigen.

“We believe Vertical/Trigen is a strong platform on which to build a diversified North American pharmaceuticals business. The company’s existing product footprint and development pipeline can be leveraged in combination with product acquisition and licensing opportunities to create a broader branded and generics company with a presence in a number of attractive therapeutic markets,” said David Burgstahler, Partner and President of Avista.

Upon closing of this acquisition, Brian Markison, a Healthcare Industry Executive at Avista, has joined the company’s Board of Directors as Executive Chairman. Mr. Markison has more than 30 years of operational, marketing, commercial development, and sales experience with international pharmaceutical companies. Most recently, he was President and Chief Executive Officer of Fougera Pharmaceuticals, a dermatology-focused pharmaceuticals company that was spun off from Nycomed A/S in 2011 and sold to Sandoz, the generics division of Novartis, in July 2012. Prior to leading Fougera, Mr. Markison served as Chairman and Chief Executive Officer of King Pharmaceuticals before it was acquired by Pfizer.

“I am thrilled to be joining Vertical/Trigen as Executive Chairman. Having led other specialty pharmaceutical companies through various phases of development, I am very excited about the company’s potential to increase market share with existing products while pursuing attractive add-on opportunities to accelerate growth. I look forward to working with the Vertical/Trigen team to support these efforts,” said Mr. Markison.

Avista Capital Partners, with over $5 billion of capital under management, makes control or influential minority investments in growth-oriented energy, healthcare, communications & media, industrials, and consumer businesses. The firm was founded in 2005 and is based in New York with offices in Houston and London (www.avistacap.com).