Deal in Focus: Forbion to reap 50x on $1.55bn Dezima sale

Biosciences-focused Forbion Capital Partners has exited Dutch biotech Dezima Pharma to US group Amgen for $1.55bn. Pending approval by the US Federal Trade Commission, the deal is expected to complete in Q4 2015. It will see Amgen pick up all Dezima shares for the purchase price, $300m of which will be paid upfront.

In addition, the shareholders – majority owner Forbion and minority investors BioGeneration Ventures and New Science Ventures – stand to reap a further $1.25bn and a royalties percentage in the low-single-digit region. These are contingent on the company reaching a number of development and sales milestones in the coming years.

A share of all proceeds will be earmarked for Mitsubishi Tanabe Pharma, which will keep the licence rights of Dezima's cholesterol-reducing therapy TA-8995 it acquired in 2013. The Japanese group will also retain control over the drug's development and sales in the Asian country.

Royalties aside, total proceeds from the sale of Forbion's majority stake could net the VC a 50x return, according to managing partner Sander Slootweg.

Early bird
Forbion's eye-catching return comes three years after it backed Dezima's foundation. In 2012, the firm provided seed financing to the nascent biotech alongside peers BioGeneration and New Science – the trio had been approached by professor and researcher John Kastelein. "Besides being an adviser for us, he worked as a consultant for Mitsubishi. When phase-I trials concluded for TA-8995 and Mitsubishi decided not to go ahead with it, Kastelein turned to us and suggested we speak with Mitsubishi. It took a year and a half to negotiate licensing rights with them after that," Slootweg tells unquote".

Becoming operational after the seed round, Dezima was then structured as a project organisation, with a management hub populated initially by Forbion names – the strategy is becoming increasingly popular among PE-backed pharma groups, PwC partner Hein Marais told unquote" recently. The business then initiated the second phase of TA-8995's clinical trials and enlisted fellow Forbion portfolio company Xention; its drug development team took over the studies and worked to generate evidence of the therapy's large-scale commercial potential.

In February 2013, Forbion, BioGeneration and New Sciences injected a further €9.8m in Dezima. The series-A, led by the former's €6m contribution, was followed by a series-B in January 2015 and a subsequent €3m bridging financing. Put together, the rounds brought the total capital injected into the business by the three VCs up to €20m, according to Slootweg.

From IPO to trade sale
The possibility of an exit for Dezima first emerged in August 2014, when results from previous TA-8995 tests became available. "The data showed the therapy being more potent than existing and new cholesterol-lowering pills in the market," says Slootweg. "We knew the next step would be to conduct trials among thousands of patients, which would cost hundreds of millions." The VC owners initially contemplated organising a large privately funded round, followed by a public listing on Nasdaq. According to their calculations, Dezima stood to raise $250m if that route was followed.

However, the shareholders were approached by a mounting number of corporate suitors with dyslipidemia franchises, especially after data from the phase-II study was featured in specialised publication The Lancet. Of all tendered bids, Amgen's caught the VCs' attention due to the royalty element, which is rarely found among M&A buyers, according to Slootweg.

People
Forbion Capital Partners – Sander Slootweg
Dezima Pharma – Rob de Ree, John Kastelein.

Advisers
Vendor – Moelis & Company (Corporate finance); NautaDutilh (Legal).
Acquirer – Covington & Burling (Legal); De Brauw Blackstone Westbroek (Legal).

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Exits
• Healthcare
• Benelux
• Deal in focus
• Netherlands
• Trade sale
• unq2015oct