CSL strikes largest biopharma deal of 2021 with $11.7B Vifor Pharma buy

CSL Ltd.'s US$11.7 billion planned all-cash acquisition of Vifor Pharma AG is the biopharma sector's largest deal of 2021, as the Australian pharmaceutical company expands further into kidney disease.

The maker of vaccines and plasma treatments will acquire Vifor for $179.25 per share, representing a 61% premium to the Swiss-based company's Dec. 1 closing price.

The acquisition, which CSL expects to be immediately accretive to earnings in the first full year of ownership, will add 10 commercialized products, including iron deficiency injections Ferinject and Venofer, as well as Veltassa, for treating high potassium levels in the blood. CSL's pipeline of drugs in development will also expand 37%, with up to four launches expected during 2022-2023.

Recent months have seen Vifor's drug Korsuva approved for itching associated with chronic kidney disease and Tavneos — marketed in the U.S. by ChemoCentryx Inc. — approved for a type of inflammation of the blood vessels. These latest market entrants will bolster Vifor's main focus areas of nephrology, dialysis and iron deficiency, CSL said.

"Vifor Pharma will expand our presence in the rapidly growing nephrology market while giving us the opportunity to leverage our complementary scientific expertise," CSL CEO Paul Perreault said in a statement Dec. 14. "Vifor Pharma offers CSL near-term value along with a clear path to long-term sustainable growth."

CSL said the market for nephrology, a term for the treatment of kidney diseases, is growing toward an estimated $25 billion value by 2026. This is driven by an aging population and increased prevalence of chronic kidney disease risk factors such as diabetes and heart disease, the drugmaker said.

While Vifor will face potential competition from generic-drug versions of its medicines from 2024 onward, CSL seems confident in the potential of the portfolio, Jefferies analyst David Stanton said in a Dec. 14 note. "CSL has a strong track record in integrating acquisitions and we think it will in this case," Stanton said.

The tender is expected to begin around Jan. 18, 2022, and the transaction is likely to complete around mid-2022, the companies said. It is the first deal by the Melbourne, Australia-based drugmaker to pass the $1 billion mark — the next closest being the $925 million acquisition of U.S. coagulation-therapy maker Aventis Behring by CSL's ZLB Bioplasma unit in 2003.

In CSL's most recent earnings call Aug. 18, Perreault said the company's executives were not "serial acquirers." "We've always been prudent in our approach, which is if there's something that we can add value to that's in our area of core competencies, core capabilities or our core knowledge, then it's something I'm interested in," the CEO added.

The deal will add about 2,600 staff worldwide to CSL's workforce, which already includes over 1,800 employees in Switzerland across operations including research and development and drug manufacturing. The company's Bern, Switzerland-based unit CSL Behring AG has invested CHF 1.26 billion into facilities in the area since 2000 to meet the growing global demand for its immunoglobulin medicines.

PJT Partners is acting as lead financial adviser to CSL for the deal, with BofA Securities and Goldman Sachs also acting as financial advisers. Credit Suisse is acting as tender offer manager in Switzerland and financial adviser. Centerview Partners UK LLP is acting as financial adviser to Vifor.