Dublin-based drug firm Azur Pharma, led by former Elan executive Séamus Mulligan, has spent more than €20 million on the buy-out of the privately held US firm Pharmelle of Phoenix, Arizona.
The transaction marks the start of a concerted effort by Mr Mulligan, the chairman and chief executive of Azur, to achieve scale in the US. Pharmelle sells urology and female health products but its sales force of 35 is located throughout the US.
Azur wants to make use of such personnel for the sale of non-Pharmelle products. The firm is also understood to be exploring opportunities to acquire other pharmaceutical companies and products.
"We are actively engaged in exploring other transactions," said a spokesman.
Formed in 2005 with €40 million in capital from private clients of Davy Stockbrokers, Azur specialises in the sale and distribution of strong drug products that are nearing the end of their patents.
The company sometimes modifies patents and it continues to sell the drugs when they come off patent.
Azur does not engage in research and development, although another firm linked to Mr Mulligan, Circ Pharma, does.
Azur's 2006 revenues were in the region of $10 million (€7.59 million). It is understood that the Pharmelle transaction will bring its annual revenues to $20 million. The consideration was not disclosed but is understood to be in excess of €20 million.
While the deal was funded through Azur's own resources, the firm believes it would have access to significant funding from outside the firm should appropriate acquisition opportunities arise in the future.
The Pharmelle transaction is Azur's second big acquisition since its formation.
In January 2006, the firm spent $11 million on the acquisition of a product called Gastrocrom, for the treatment of a gastrointestinal disorder known as mastocytosis, from US group UCB Pharma Inc.
Mr Mulligan worked for 20 years with Elan until 2004, most recently as executive vice-president business and corporate development. In the latter part of his career with Elan, he led a restructuring process that saw the group realise more than $2 billion on the disposal of 40 assets over 18 months.
The identity of the Davy clients behind the investment in the company is not known.
