Reliant Pharma Knocks EqualLogic Off Its Throne

Cardiovascular drug company Reliant Pharmaceuticals just announced that it will be acquired by GloxaoSmithKline for $1.65 billion in cash. Assuming that figure doesn’t include earnouts – and there is no indication that it does – this would be the largest all-cash exit ever of a VC-backed company. The prior record holder was Dell’s planned $1.4 billion acquisition of EqualLogic, which was announced earlier this month.

Reliant is pretty confident that this sale will pass regulatory muster, as it already has pulled its IPO filing. The company has raised over $500 million from firms like Alkermes Inc., Bay City Capital, Invermed Associates, Morgan Stanley Private Equity, Goldman Sachs, Versant Ventures. Its final post-money VC valuation was just over $860 million, from a tranched-out Series D round that held closes between 2003 and 2005.

Here is the press release:
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GlaxoSmithKline (LSE & NYSE: GSK) and Reliant Pharmaceuticals Inc. announced today that they had reached an agreement under which Reliant will be acquired by GSK for $1.65 billion (£800 million) in cash.
Reliant, a privately held specialty pharmaceutical company focused on cardiovascular therapies, recorded net sales of $341 million in the nine months ending September 30, 2007, an increase of 62% over the comparable time period a year earlier.
GSK expects the transaction will be slightly accretive to earnings in 2008, excluding integration costs, and will create additional value in following years.

Through its strategic in-licensing and development strategy, Reliant has developed a portfolio of specialty medicines combating heart disease, including US rights to Lovaza™ (omega-3-acid ethyl esters), a treatment for adult patients with very high levels of triglycerides.

Triglycerides are fatty substances in the blood associated with increased risks of coronary artery disease. Lovaza is indicated as an adjunct to diet to reduce triglyceride levels in adults with very high (≥500 mg/dL) triglyceride levels.
High lipid levels continue to be a growing health problem in the United States, with up to 5 million people having triglyceride levels classified as very high. Lovaza is the only prescription omega-3 medicine approved by the US Food and Drug Administration for the treatment of very high triglycerides, and remains the only omega-3 medicine that, along with diet and exercise, has been clinically proven to provide a 45% reduction in triglycerides in adult patients with very high triglyceride levels.

Launched in late 2005, Lovaza (formerly known as Omacor®) achieved rapid uptake among patients and health care professionals. In the nine months ending September 30, 2007, net sales were $206 million, an increase of 115% over the first nine months of 2006.
Lovaza competes in the non-statin dyslipidemia segment of the US cardiovascular market, where it had achieved a 10% market share of total prescriptions as of September 30, 2007. Sales in the non-statin dyslipidemia market totaled approximately $2.2 billion in 2006 and are expected to grow in excess of 20% a year. GSK believes there is significant opportunity for future growth of Lovaza in this market segment.

Reliant licensed the rights to Lovaza in the US and Puerto Rico from Pronova BioPharma ASA (Oslo: PRON), a publicly traded Norwegian company that will continue to supply the product’s primary material. Rights to Lovaza in other markets have been licensed by Pronova to several other companies.

Commenting on the acquisition agreement, Chris Viehbacher, President, US Pharmaceuticals, GSK, said, “The addition of Lovaza to the GSK portfolio adds a new driver of sales growth in the US business. It represents a strong strategic fit, complementing Coreg CR®, a leading treatment for heart failure and hypertension, and adds to our growing profile in the cardiovascular disease area.”

“Today is a momentous date for Reliant,” said Bradley T. Sheares, CEO of Reliant. “We are very proud of the work that our employees have done to build this company, particularly the energy and perseverance of our sales teams, who have demonstrated their worth in building a formidable Lovaza franchise in less than 24 months. We see great additional potential through this acquisition for Lovaza and the patients who could benefit from it.”
The acquisition is subject to approval by the US Federal Trade Commission and is expected to conclude before year-end.

In addition to Lovaza, Reliant Pharmaceuticals, based in Liberty Corner, NJ, currently markets three other in-licensed cardiovascular products – high blood pressure treatments DynaCirc CR® (isradipine) and InnoPran XL® (propanolol HCl), as well as Rythmol SR® (propafenone), which treats abnormal heart rhythms, or arrhythmia.

About GSK
GlaxoSmithKline – one of the world’s leading research-based pharmaceutical and healthcare companies – is committed to improving the quality of human life by enabling people to do more, feel better and live longer. For company information, visit www.gsk.com.

About Reliant Pharmaceuticals
Reliant Pharmaceuticals, Inc. is a pharmaceutical company that specializes in the development, commercialization and marketing of prescription therapeutic products. Reliant currently markets four cardiovascular products in the United States and focuses on promoting its products to targeted primary care and specialty physicians, as well as selected hospitals and academic centers in the United States. Reliant’s sales force infrastructure is comprised of approximately 880 sales and marketing professionals nationwide.