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1 August, 2022 - 11:29 By Tony Quested

Arecor to raise c£6m and acquire Tetris Pharma

Cambridge’s diabetes solution trailblazer Arecor Therapeutics has triggered a placing of shares to raise around £6 million as it pursues a proposed acquisition of Northampton company Tetris Pharma.

AIM-quoted Arecor has entered into a conditional agreement to acquire the entire issued share capital of Tetris – a commercial stage speciality pharmaceutical company with a sales and distribution team and a platform focused on injectable speciality products across the UK and Europe. 

Arecor directors say the acquisition would add a key commercial diabetes product to the company’s portfolio as well as complementing its existing specialty hospital products franchise – offering the potential to accelerate significant revenue growth for the Cambridge business.

Arecor CEO Sarah Howell said: “The board believes that the acquisition of Tetris Pharma is a compelling opportunity to accelerate Arecor’s commercially-driven strategy alongside our core diabetes and partnered products businesses. 

“We will gain an existing, revenue-generating, sales, marketing and distribution platform which we believe is highly complementary to our existing specialty hospitals products business and has significant growth potential. 

“The lead product, Ogluo®, meets a key patient need for people living with diabetes at risk of severe hypoglycaemia, which is a therapeutic area that we understand well, giving us confidence in its prospects and our ability to deliver. 

“The platform would also add future optionality to our specialty products franchise by providing the capability to take selected products to market in the UK and Europe where appropriate in addition to our already proven partnering strategy.”

Tetris Pharma is targeting a significant market share within an existing c.£100 million+ segment across the licensed territory. Ogluo® was launched by Tetris Pharma in the UK earlier this year and launches across key European territories are planned over the next 12 to 24 months.

The expected future cash contribution to Arecor can be used to accelerate value enhancing proprietary product development.

In terms of the proposed acquisition, Arecor has agreed to acquire the entire issued share capital of Tetris Pharma for an initial consideration comprising the issue of 651,726 new ordinary shares to the Tetris Pharma sellers. 

The company has also agreed to discharge certain Tetris existing liabilities priced at around £2m. 

Deferred consideration of up to £4m in aggregate is payable to the Tetris Pharma sellers through three earn-out payments on the first, second and third anniversaries of completion, subject to revenue and EBITDA performance targets.

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