On October 10, 2019, UCB announced that it had reached an agreement whereby UCB would purchase and acquire 100% of the outstanding shares of Ra Pharmaceuticals Inc., a U.S. clinical-stage biopharma company based in Cambridge, Massachusetts.
On April 2, 2020, UCB announced the successful acquisition of Ra Pharma, a now wholly owned subsidiary of UCB, for a total transaction cash value of $ 2.3 billion (U.S.) based on $ 48 (U.S.) in cash per Ra Pharma share and taking into consideration Ra Pharma’s cash and settlement of acquisition-related expenses.
By acquiring Ra Pharma, UCB has reinforced its neurology portfolio by adding zilucoplan, a Phase 3 investigational molecule in myasthenia gravis (MG). Zilucoplan is also under early-stage investigation in other complement-mediated diseases including amyotrophic lateral sclerosis (ALS) and immune-mediated necrotizing myopathy (IMNM). The acquisition of Ra Pharma will also broaden the scientific expertise scope of UCB as UCB got access to Ra Pharma’s breakthrough macrocyclic peptide chemistry platform. Last but not least, the acquisition will strengthen UCB’s R&D footprint in the U.S.
The investment represents an amount of US$ 2 billion (net of Ra Pharma cash) based on US$ 48 in cash per Ra Pharma share, UCB has finalized the purchase price allocation. The table below shows the final amounts for the net assets acquired and goodwill. The goodwill is attributable to expected synergies with UCB’s biotech research activities as well as skilled workforce. Goodwill is not expected to be tax deductible. Adjustments due to the initial purchase price allocation mainly relate to the recognition of the intangible asset zilucoplan and related deferred taxes. For the valuation of the zilucoplan intangible asset, a discount rate of 12.5% has been used. Estimated cash flows were taken into account for a period of 26 years. No material receivables were acquired as part of the business combination. No contingent liabilities have been identified. Acquisition-related costs for an amount of € 95 million have been recorded under Other Expenses in the period ending December 31, 2020. No revenue is included in the consolidated income statement for the reporting period since acquisition. Except for transaction costs, the loss of Ra Pharma included in the consolidated income statement for the reporting period since acquisition is not material. The amounts of revenue and loss for Ra Pharma assuming the acquisition date would have been January 1, 2020 would not have been materially different from what is included now in the consolidated income statement since April 2, 2020.
Initial opening statement of financial position
Adjustments due to initial purchase price allocation
Adjusted opening statement of financial position
Total acquisition value
Cash consideration paid
Recognized amounts of identifiable assets acquired and liabilities assumed
Property, plant and equipment (incl. ROU assets*)
Other current assets
* ROU asset = right of use asset