On June 5, 2020, UCB acquired Engage Therapeutics Inc. Engage is a small, privately held company founded by parents with children living with epilepsy, who have been developing a new therapeutic solution for people living with epilepsy – Staccato® Alprazolam. Staccato® Alprazolam is a small, single-use, non- invasive, hand-held inhalation device that delivers alprazolam with a single, normal breath. This Phase 2b development medicine has been specifically designed to treat a currently totally unmet need: rapid termination of an ongoing prolonged epi- leptic seizure (within 30 seconds – 2 minutes) with no recurrence within two hours.
The addition of Staccato® Alprazolam to UCB’s epilepsy portfolio means that, once this medicine is approved, UCB has the potential to deliver on-demand, rapid seizure termination for 20-30% of people living with epilepsy. Additionally, the product has the potential for use in connection with seizure detection/ prediction technology.
UCB Holdings Inc. acquired 100% of the shares of Engage. The Purchase Price for these shares consists out of a closing payment (US$ 125 million) adjusted for net debt and transaction costs and milestone payments for a total amount of US$ 145 million. These payments are contingent on future milestones. The fair value of the contingent consideration is estimated at € 88 million. This fair value takes into account the assumed likelihood and timing of achieving the arrangement’s milestones. No changes were necessary to this estimate since acquisition date. The liability at closing rate is presented within non-current ‘Trade and other liabilities’ for an amount of € 61 million and within current ‘Trade and other liabilities’ for an amount of € 20 million. Upon acquisition, an amount of € 3 million was paid by UCB to settle net debt and transaction costs of Engage. This payment cannot be considered as being part of the consideration transferred to the sellers in exchange for control of Engage in accordance with the provisions in IFRS 3 Business combinations. UCB has finalized the purchase price allocation. The table below shows the initial amounts for the net assets acquired. No goodwill has been recognized. Adjustments due to the initial purchase price allocation mainly relate to the recognition of the intangible asset Staccato® Alprazolam and related deferred taxes. No material receivables were acquired as part of the business combination. No contingent liabilities have been identified. Acquisition-related costs for an amount of € 4 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. The loss of Engage included in the consolidated income statement for the reporting period since acquisition is not material. The amounts of revenue and loss for Engage 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 June 5, 2020.
Initial opening statement of financial position
Adjustments due to purchase price allocation
Adjusted opening statement of financial position
Total investment value
Cash consideration paid
Amount paid to escrow account
Recognized amounts of identifiable assets and liabilities