(Reuters) – BC Partners Ltd, Onex Corp and American Securities LLC are competing for Ikaria Inc, a private equity and venture capital-backed specialty drug company that may fetch up to $2 billion, according to people familiar with the matter.
The three private equity firms are among those through to the second round of bidding for Ikaria, with final offers currently due by early December, the people said this week on condition of anonymity because the process is confidential.
Ikaria, BC Partners and American Securities declined to comment while an Onex spokeswoman did not respond to a request for comment.
Hampton, New Jersey-based Ikaria’s main drug INOMAX delivers nitric oxide gas to treat newborns with serious trouble breathing, allowing for more oxygenated blood to circulate in their bodies. It also has a pipeline of what it calls “critical care” products for patients with life-threatening injuries or disease.
Ikaria, whose owners include New Mountain Capital LLC, ARCH Venture Partners LP and Venrock Associates LP, is working with Morgan Stanley (MS.N) and Credit Suisse Group AG (CSGN.VX) on the possible sale, people familiar with the matter told Reuters last month.
The company was created in 2007 when investors led by New Mountain merged a biotechnology company also called Ikaria with German industrial gas producer Linde AG’s (LING.DE) INO Therapeutics, in a $670 million cash and stock deal.
The deal left Linde as minority investor in Ikaria, creating a company with more than $160 million in revenue. Six years later, Ikaria had about $361 million in 12-month revenue as of the end of March 2013, according to Moody’s Investors Service Inc.
With several of its key patents expiring this year and next, Ikaria is more vulnerable to competition although its heart failure patents expire in 2029 and some others in 2031, according to Moody’s.
Ikaria filed for an initial public offering in 2010 but withdrew the registration that same year citing market conditions. It owners have taken several dividends from the company, including a $475 million distribution last summer through borrowing.