Recipharm completes acquisition of Kemwell AB and Cirrus Pharmaceuticals Inc. and resolve on share issues

On 18 April 2016, Recipharm announced that it had entered into two separate
agreements to acquire pharmaceutical contract development and manufacturing
operations (CDMO) from Kemwell. The first acquisition comprises operations in
the US and Sweden, and the second acquisition comprises operations in India. The
conditions for the first acquisition have now been fulfilled and Recipharm will
complete this transaction today. The second acquisition, regarding Kemwell’s
pharmaceutical operations in India, is conditional on governmental approvals,
and is expected to close before year end.
The acquisition now to complete is comprising Cirrus Pharmaceuticals Inc., with
operations in the US, with services including development of inhalation, liquid,
semi-solid, solid and parenteral products with emphasis on early formulation
work as well as development of analytical methods and testing, and Kemwell AB in
Sweden, with services primarily including manufacturing of APIs, solids and semi
-solid formulations. The sellers of Kemwell’s operations in the US and Sweden
are Kemfin Holdings Private Ltd (“Kemfin”) and a minority seller (the “Minority
Seller”).

Purchase price and issue of shares

The acquisition price for Kemwell AB and Cirrus Pharmaceuticals Inc. amounts to
approximately USD 85 million (approximately SEK 706
million)[1] (http://file:///G:/Shared/Corporate%20Development/IR/Kalista/Press%2
0 
release%20-%20Closing%20EN%2020160523.docx#_ftn1) on a cash and debt free basis.
With regard to the estimated net debt of USD 10.2 million (approximately SEK 85
million)(1), the preliminary purchase price amounts to approximately USD 75
million (approximately SEK 621 million)1, of which USD 55 million (approximately
SEK 458 million)1 is to be paid through a share issue of class B shares at a
subscription price of SEK 145.06 per share, and the remainder in cash. The Board
of Directors today, by virtue of the authorisation from the Extraordinary
General Meeting on 10 May 2016, resolved on a share issue in kind of 3,159,572
series B shares to the sellers of Kemwell AB. The new shares are expected to be
registered with the Swedish Companies Registration Office around 26 May 2016.
The cash part of the purchase price for Kemwell AB and Cirrus Pharmaceuticals
Inc. preliminarily amounts to approximately USD 19.6 million (approximately SEK
163 million)(1).

Kemfin and the Minority Seller have undertaken not to sell or in other respects
transfer their respective shareholdings in Recipharm in respect of the share
issue in kind during a period of 12 months from the closing date.

Directed share issue in cash

As previously announced, Kemfin and the Minority Seller, provided they receive
shares in the issue in kind as described above prior to the record date 23 May
2016 in the ongoing rights issue of Recipharm, have agreed to participate in the
rights issue through the exercise of subscription rights. Since Kemfin and the
Minority Seller will not receive any subscription rights in the rights issue,
the Board of Directors today, by virtue of the authorisation from the
Extraordinary General Meeting on 10 May 2016, resolved on a directed share issue
in cash of 631,914 series B shares to the sellers of Kemwell AB at a
subscription price of SEK 82 per share, corresponding to the subscription price
in the rights issue. At full subscription, the rights issue of approximately SEK
805 million and the directed share issue of approximately SEK 51 million as
stated above means that Recipharm will receive a total of approximately SEK 856
million before issue costs.

Information on Kemwell AB and Cirrus Pharmaceuticals Inc.

The US development business is located in Research Triangle Park, North Carolina
and employs just under 50 people (full-time equivalent). There are about 120
customers and services offering include both development capability of
inhalation, nasal and transdermal products new to Recipharm, and liquid, semi
-solid, solid and parenteral products with emphasis on early formulation work as
well as development of analytical methods and testing. Recently, the business
has also commissioned a GMP suite allowing for expansion into manufacturing of
clinical trial material. The services are provided either on a stand-alone basis
or as a more comprehensive pharmaceutical product development program.

The Swedish business is located in Uppsala and employs around 240 people (full
-time equivalent). It consists of two production units including a fully
integrated primary and secondary manufacturing facility dedicated to a limited
number of products, based on the same API and supplied essentially to one Big
Pharma customer. There is also a small general pharmaceutical manufacturing
unit. Manufacturing services offering include APIs, solids and semi-solid
formulations. More than 95 per cent of the Swedish production is exported to
over 60 countries including the US and Japan.

For the 12-month period ending on 31 December 2015, the US and Swedish
businesses reported net sales of SEK 462 million and adjusted EBITDA of SEK 56
million.[2] (http://file:///G:/Shared/Corporate%20Development/IR/Kalista/Press%2
0 
release%20-%20Closing%20EN%2020160523.docx#_ftn2) Cost savings and synergies are
expected to yield more than SEK 25 million per annum when fully realized,
expected in Q4 2017. These cost savings and synergies will be driven by asset
rationalization and savings in general within administration activities. The non
-recurring costs for implementation are expected to amount to approximately SEK
7 million.

For further information please visit www.recipharm.com or contact:

Thomas Eldered, CEO, +46 8 602 52 10
Björn Westberg, CFO, ir@recipharm.com, +46 8 602 46 20

This information is published in accordance with the Swedish Securities Market
Act, the Swedish Financial Instruments Trading Act and/or the regulations of
Nasdaq Stockholm. This information was submitted for publication on 23 May 2016,
at 8:30 am CET.

About Recipharm
Recipharm is a leading CDMO (Contract Development and Manufacturing
Organisation) in the pharmaceutical industry employing some 3,200 employees.
Recipharm offers manufacturing services of pharmaceuticals in various dosage
forms, production of clinical trial material and APIs, and pharmaceutical
product development. Recipharm manufactures several hundred different products
to customers ranging from Big Pharma to smaller research- and development
companies. Recipharm’s turnover is approximately SEK 4.6 billion and the Company
operates development and manufacturing facilities in France, Germany, India,
Israel, Italy, Portugal, Spain, Sweden and the UK and is headquartered in
Jordbro, Sweden. The Recipharm B-share (RECI B) is listed on Nasdaq Stockholm.

For more information on Recipharm and our services, please visit
www.recipharm.com

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[1] (http://file:///G:/Shared/Corporate%20Development/IR/Kalista/Press%20release
% 
20-%20Closing%20EN%2020160523.docx#_ftnref1) Exchange rate of USD/SEK of 8.3331.

[2] (http://file:///G:/Shared/Corporate%20Development/IR/Kalista/Press%20release
% 
20-%20Closing%20EN%2020160523.docx#_ftnref2) Numbers according to local GAAP and
adjusted for non-recurring losses of approximately SEK 14 million.
Recipharm AB (publ)
Corporate identity number 556498-8425
Address Lagervägen 7, SE-136 50 Jordbro, Sweden, Telephone 46 8 602 52
00, Fax 46 8 81 87 03
www.recipharm.com