Biote to Purchase Asteria Health
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Insights
The acquisition of Asteria Health by Biote Corp represents a strategic move towards vertical integration, which is a significant trend in the healthcare industry. Vertical integration allows companies to control more stages of their supply chain, potentially leading to improved margins and reduced dependency on external suppliers. From a market perspective, Biote's move could be interpreted as a proactive step to secure its manufacturing capabilities, especially in the context of recent global supply chain disruptions.
Moreover, the transaction is structured with an initial purchase price and an additional performance-based consideration, which aligns the interests of both parties towards achieving production efficiencies. This could be a signal to investors that Biote is confident in Asteria Health's operational capabilities and its ability to contribute positively to the company's financial performance. However, the minimal near-term revenue impact suggests that the immediate financial benefits may be limited, with the true value of the acquisition potentially unfolding over the longer term as Biote leverages Asteria Health's expertise in product development.
Biote's decision to fund the acquisition with cash from its balance sheet is indicative of a strong liquidity position, which is reassuring for stakeholders. The $8.5 million purchase price, with a contingent earn-out of $500,000, is modest relative to the size of many healthcare transactions, suggesting a targeted and potentially accretive approach rather than a transformative one. Investors will likely scrutinize the post-acquisition integration process and its impact on Biote's margin profile, as insourcing manufacturing could lead to cost savings and an enhanced margin profile over time.
It is also important to note the potential risks associated with the integration of a 503B outsourcing facility, such as regulatory compliance and operational execution. The success of this transaction will depend on Biote's ability to effectively manage these aspects while maintaining the quality and consistency of the products. The addition of Dr. Fixler's expertise in compounding and specialty pharmacy is a strategic asset that could mitigate some of these risks.
503B outsourcing facilities are subject to FDA oversight and are required to comply with current Good Manufacturing Practice (cGMP) regulations. Biote's acquisition of Asteria Health, a 503B manufacturer, demonstrates a commitment to regulatory compliance and product quality in the compounding of bioidentical hormones. This move could provide Biote with a competitive advantage in the hormone optimization market by ensuring a consistent supply of high-quality products.
The expertise brought by Asteria Health in 503B manufacturing is crucial for Biote's long-term strategy to develop innovative therapeutic wellness products. The ability to control pharmacokinetic research efforts could accelerate the development of new products and allow for more efficient clinical trials. The vertical integration may also enable Biote to respond more rapidly to market demands and regulatory changes, which is particularly important in the dynamic healthcare sector.
Strategic and accretive transaction enables vertical integration of hormone product manufacturing
Through this transaction, Biote is strengthening the Company’s control over its supply chain and enhancing efficiency. Additionally, Asteria Health provides Biote with expertise in 503B manufacturing, enabling longer-term development of innovative therapeutic wellness products. Biote plans to phase in manufacturing from Asteria Health. Because Asteria Health is currently a supplier to Biote-certified practitioners, there is expected to be minimal near-term revenue impact to Biote from the transaction.
Terry Weber, Biote Chief Executive Officer, commented, “We are pleased to announce an agreement to acquire Asteria Health, and we welcome their talented and dedicated team to Biote. This strategic transaction expands and strengthens Biote’s capabilities by enabling the vertical integration of our manufacturing and providing direct control over our pharmacokinetic research efforts. As we insource manufacturing, we anticipate improvement to our margin profile. We also see a longer-term opportunity to leverage Asteria Health’s product development expertise to expand our offerings with therapeutic wellness products for Biote-certified practitioners.”
Bill Fixler, PharmD, President of Asteria Health, said, “Asteria Health is proud of our longstanding relationship with Biote, an established leader in hormone replacement education and training. Both Asteria Health and Biote share an unwavering commitment to promoting patient health and evidence-based therapeutic wellness, and we are delighted to join Biote to further this mission.”
Dr. Fixler brings to Biote more than two decades of compounding and specialty pharmacy experience, with particular expertise in manufacturing compliance and product formulation.
Transaction Terms
Under the terms of the acquisition agreement, the purchase price is
The acquisition is subject to customary closing conditions, with closing anticipated to occur in the first quarter of 2024.
Truist Securities served as financial advisor to Biote.
About Biote
Biote is transforming healthy aging through innovative, personalized hormone optimization and therapeutic wellness solutions delivered by Biote-certified medical providers. Biote trains practitioners to identify and treat early indicators of aging conditions, an underserved global market, providing affordable symptom relief for patients and driving clinic success for practitioners.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Some of the forward-looking statements can be identified by the use of forward-looking words. Statements that are not historical in nature, including the words “may,” “can,” “should,” “will,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “hope,” “anticipate,” “believe,” “seek,” “target,” “continue,” “could,” “might,” “ongoing,” “potential,” “predict,” “would” and other similar expressions, are intended to identify forward-looking statements. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual results or developments to differ materially from those expressed or implied by such forward-looking statements, including but not limited to: the potential that our acquisition of Asteria Health is not consummated; the success of our dietary supplements to attain significant market acceptance among clinics, practitioners and their patients; our customers’ reliance on certain third parties to support the manufacturing of bio-identical hormones for prescribers; our and our customers’ sensitivity to regulatory, economic, environmental and competitive conditions in certain geographic regions; our ability to increase the use by practitioners and clinics of the Biote Method at the rate that we anticipate or at all; our ability to grow our business; the significant competition we face in our industry; the impact of strategic acquisitions and the implementation of our growth strategies; our limited operating history; our ability to protect our intellectual property; the heavy regulatory oversight in our industry; changes in applicable laws or regulations; the inability to profitably expand in existing markets and into new markets; the possibility that we may be adversely impacted by other economic, business and/or competitive factors, including recent bank failures; and future exchange and interest rates. The foregoing list of factors is not exhaustive. You should carefully consider the risks and uncertainties described in the “Risk Factors” section of the Biote’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023 and other documents filed by Biote from time to time with the Securities and Exchange Commission. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Biote assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Biote does not give any assurance that it will achieve its expectations.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240117486263/en/
Investor Relations:
Eric Prouty
AdvisIRy Partners
eric.prouty@advisiry.com
Media:
Press@biote.com
Source: biote Corp.
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