Biovitrum and Swedish Orphan will be combined forming Swedish Orphan Biovitrum with pro forma revenues 2009 of approximately SEK 2 billion and an EBITDA margin of 15 percent. Biovitrum will pay an upfront consideration of SEK 3.5 billion (on a cash and debt free basis), to be financed by a fully guaranteed rights issue, an issue in kind and bank financing. The Transaction will be instantly accretive to earnings per share for Biovitrum's shareholders.

Shared mission. Biovitrum AB (publ) ("Biovitrum") and Swedish Orphan International AB ("Swedish Orphan") will be combined forming Swedish Orphan Biovitrum ("SO-Bi") (the "Transaction"). Biovitrum and Swedish Orphan share the same mission and business philosophy of developing and making available orphan drugs and niche specialty pharmaceuticals for patients with rare diseases and patients with high unmet medical needs.

Complementary capabilities. Swedish Orphan brings recognized and successful business development capabilities, strong expertise in distribution, marketing, regulatory affairs, medical and customer support, along with its pan-European presence. This is highly complementary to Biovitrum's strong product development expertise and manufacturing skills. More specifically, Swedish Orphan brings two proprietary orphan and niche specialty drugs as well as a diverse in-licensing portfolio of approximately 50 orphan and niche specialty drugs with significant growth potential to the combined group. Biovitrum contributes with its strong hemophilia franchise, manufacturing capability, several marketed niche specialty products, of which three are proprietary, as well as a late stage clinical development pipeline within rare diseases.

Strong platform for growth and profitability. The combination of the two companies is expected to be instantly accretive to earnings per share for Biovitrum's shareholders. The combined group will generate sales from approximately 60 orphan/niche specialty products plus a pipeline of two phase III and five phase II clinical product candidates to drive future growth. The combination will allow the new group to realize annual operating cost synergies and cost avoidance in excess of SEK 100 million with full effect from 2011. In addition, Swedish Orphan's established European sales and marketing infrastructure is expected to accelerate the growth of Biovitrum's current products as well as future pipeline products. The pro forma revenues for 2009 are estimated to reach SEK 2 billion with an EBITDA margin of about 15 per cent. The new group has a target to reach sales exceeding SEK 5 billion with an EBIT margin exceeding 30 per cent in 2015, based on its current product portfolio and pipeline.

Shareholder support. Shareholders in Biovitrum, including Investor AB, representing 67 per cent of the capital and votes in Biovitrum in aggregate, have expressed their support for the Transaction and the industrial logic in the combination. The major shareholders in Biovitrum, Investor AB and MPM Capital, will propose Dr Bo Jesper Hansen, CEO of Swedish Orphan, to become Executive Vice Chairman in the new SO-Bi group. After the Transaction he will own 3 per cent of the shares in SO-Bi. Martin Nicklasson, current CEO of Biovitrum AB, will become CEO of SO-Bi.

"The two companies fit like a hand in a glove. By joining forces with Swedish Orphan, Biovitrum takes another important step in the transformation set out in the strategy adopted two years ago. In one giant leap, we form a company with a leading position within rare diseases and a solid platform for future growth and profitability," says Biovitrum's CEO Martin Nicklasson.

"Swedish Orphan has undergone a tremendous development from a business primarily focused on the Nordic region to a broad pan-European business with both proprietary and in-licensed products. Along with Biovitrum's product portfolio and late stage pipeline, we can further leverage Swedish Orphan's strong platform in a value creating manner while continuing both companies' commitment to rare disease patients and patients with unmet medical needs. This is a truly complimentary and winning combination," says Swedish Orphan's CEO Bo Jesper Hansen.

Source
Biovitrum and Swedish Orphan