BRUSSELS ( The Deal) -- Belgium's UCB is putting Kremers Urban Pharmaceuticals back on the auction block after the collapse of the agreed $1.53 billion sale of the Princeton, N.J.-based generics business to Advent International and Avista Capital Partners.
The development, announced Wednesday by the Belgian seller and the private equity firms, comes a little more than a month after the agreement, and as executive committee chairman Jean-Christope Tellier prepares to take the helm as CEO of UCB on Jan. 1.
It also comes four weeks after Kremers Urban announced a reclassification of one of its drugs by the U.S. Food and Drug Administration. The agency will no longer recommend the drug at pharmacies as an automatic replacement for Concerta, Janssen Pharmaceutical's prescription drug used to treat attention deficit hyperactivity disorder.
Kremer said in November it will perform the requested additional study on its extended-release tablet form of methylphenidate, apparently throwing off UCB's plans to complete the divestment in the first quarter of 2015.
"The decision to terminate the acquisition agreement was primarily driven by an unexpected conflict in the timing for the acquisition (including the financing) and the regulatory process," according to Wednesday's announcement.
"We are of course disappointed that we could not complete the transaction at this time but believe that the mutual termination is the right step to allow time for the needed evaluation of the best way forward and as a result to created the most value," said UCB's CFO Detlef Thielgen.
He added: "While we are working on clarifying the situation around methylphenidate ER [exteneded-release], we will continue the divestiture process for Kremers Urban."
UCB shares were down 1.4% at €63.16 in Brussels, giving it a market value of around €12.4 billion ($15.5 billion).
Calling the cancelled deal "bad news, although not completely unexpected," analyst Bernard Hanssens of Bank Degroof cut his UCB share target price to €62.50 from €60 while maintaining his hold rating on the stock.
The previous auction, run by Lazard, reportedly lured the likes of other private equity investors and Lake Forest, Ill.-based specialty drugmaker Akorn ( AKRX) , with offers below the targeted $2 billion price tag.
UCB is taking additional financial advice from BNP Paribas SA, and legal counsel from Covington & Burling LLP.
The Belgian company, which has spent the past decade transforming itself from a chemicals company with 1920s roots into a drugmaker, is seeking to sell the business six years after adding it through its €4.4 billion swoop on Germany's Schwarz Pharma AG.