Avista Capital Partners and Hamilton Lane Announce Partnership in Cosette Pharmaceuticals

Rhea-AI Summary

Avista Capital Partners and Hamilton Lane (Nasdaq: HLNE) have announced a partnership in Cosette Pharmaceuticals, a US-based specialty pharmaceutical company. Funds managed by Hamilton Lane have acquired a significant equity interest in Cosette from Avista and its co-investors. The partnership aims to accelerate innovation and growth for Cosette, which has shown robust EBITDA growth and free cash flow generation since Avista's initial investment in 2018.

Under new management, Cosette has successfully launched new products, expanded its portfolio through acquisitions and licensing deals, and diversified into branded products. The transaction enhances Cosette's balance sheet, enabling further investments in R&D and strategic acquisitions. Cosette also entered into new financing agreements with Hayfin Capital Management and a banking consortium.

Positive

• Hamilton Lane's investment provides additional capital for Cosette's growth
• Cosette has demonstrated robust EBITDA growth and free cash flow generation
• Successful diversification of portfolio with branded and innovative products
• New financing agreements to support future growth and acquisitions

Negative

• None.

Insights

Financial Analyst

Hamilton Lane's acquisition of a significant equity interest in Cosette Pharmaceuticals from Avista Capital Partners represents a notable development in the healthcare investment sector. This move suggests a robust confidence in Cosette’s future growth prospects, underpinned by its strategic focus on R&D and business development. The involvement of two major private equity firms will likely provide substantial financial backing and strategic guidance, enhancing Cosette's ability to pursue further acquisitions and innovative product launches.

From a financial perspective, the partnership strengthens Cosette’s balance sheet, enabling continued investments in R&D and strategic acquisitions. The new term loan financing with Hayfin Capital Management and the revolver provided by UBS Investment Bank and others further bolster Cosette's financial flexibility, ensuring that it has the necessary capital to drive sustained growth. Investors should closely monitor Cosette's financial performance in the coming quarters to gauge the effectiveness of these strategic initiatives.

While the infusion of capital and strategic oversight promises to enhance growth, potential risks include integration challenges with new acquisitions and the inherent uncertainties in pharmaceutical R&D. However, Cosette’s track record under Avista's initial investment, with successful product launches and market expansion, provides a solid foundation for optimism.

Pharmaceutical Industry Expert

The partnership between Avista Capital Partners and Hamilton Lane is poised to significantly impact Cosette Pharmaceuticals' R&D capabilities and market expansion efforts. With a history of launching innovative products such as Vyleesi® and Intrarosa®, Cosette has demonstrated a strong commitment to developing and commercializing novel therapies. The additional financial resources and strategic support from Hamilton Lane are likely to accelerate these efforts.

Cosette's recent acquisition of Ambien® and Ambien CR® from Sanofi US highlights its strategy of expanding its branded product portfolio. This move not only enhances Cosette’s market presence but also diversifies its revenue streams, reducing reliance on any single product. The emphasis on both branded and patent-protected drugs positions Cosette well in the competitive pharmaceutical landscape.

However, it is important to consider the competitive pressures and regulatory hurdles that can affect new product launches and market penetration. The ability to successfully integrate new acquisitions and effectively manage R&D pipelines will be important in maintaining growth momentum. Overall, the strategic partnership and financial backing provide a promising outlook for Cosette’s continued innovation and market expansion.

Significantly Enhances Cosette's Ability to Drive Further Growth Through Investments in Business Development and R&D

BRIDGEWATER, N.J. and CONSHOHOCKEN, Pa. and NEW YORK, July 17, 2024 /PRNewswire/ -- Avista Capital Partners ("Avista"), a leading New York-based private equity firm focused exclusively on healthcare, and Hamilton Lane, a leading global private markets investment management firm (Nasdaq: HLNE), today announced that funds managed by Hamilton Lane have acquired a significant equity interest in Cosette Pharmaceuticals ("Cosette"), a US-based specialty pharmaceutical company, from Avista and its co-investors. Avista and these funds managed by Hamilton Lane will jointly control Cosette going forward, with a focus on accelerating innovation and growth.

Since Avista's initial investment in Cosette in December 2018, and under the leadership of a new executive management team, Cosette has successfully launched new and innovative products across its portfolio through a significant R&D effort as well as acquisitions and licensing deals which have expanded the company's presence across existing and new markets. This includes the recent acquisition of Ambien® and Ambien CR® in the United States from Sanofi US. These initiatives have led to robust historic EBITDA growth and free cash flow generation while positioning Cosette to capitalize on compelling opportunities ahead.

Apurva Saraf, President and CEO of Cosette, stated, "This partnership is a testament to the remarkable transformation our business has achieved over the past four years, driven by an unwavering commitment to strategic business development and operational excellence. I am immensely proud of the entire Cosette team for their dedication in delivering this robust growth. We have successfully diversified our portfolio with branded products such as Clomid®, Ambien®, and Benicar®, along with innovative, patent-protected drugs like Vyleesi® and Intrarosa®. With our strong R&D and business development pipeline, we are well positioned to drive substantial growth in partnership with Avista and Hamilton Lane."

David Burgstahler, Managing Partner and CEO of Avista, added, "We value Avista's long-term relationship with Hamilton Lane and look forward to collaborating with them as a strategic partner to drive growth and value at Cosette. Our collective expertise will prove invaluable as Cosette evaluates larger M&A opportunities as part of the company's growth strategy." 

Ken Binick, Managing Director and Co-Head of Direct Equity Investments at Hamilton Lane, said, "We are excited to advance our partnership with Avista and the Cosette management team. This is a compelling opportunity for us to invest in what we believe to be a high-quality asset and management team with a demonstrated track record of impressive growth and a clear path to further value creation." 

This transaction enhances Cosette's balance sheet to continue to drive growth through investments in R&D and strategic acquisitions. The transaction will catalyze Cosette's ongoing mission to build a durable, high growth, branded pharmaceutical company in the near term.

In conjunction with the transaction, Cosette also entered into a new term loan financing with Hayfin Capital Management, and a new revolver provided by UBS Investment Bank, Capital One, National Association and Santander Corporate & Investment Bank, who acted as joint lead arrangers and joint bookrunners for the financing.

Ropes & Gray LLP advised Avista Capital Partners and Cosette Pharmaceuticals on this transaction and Debevoise & Plimpton LLP advised Hamilton Lane.

Forward-Looking Statements

Some of the statements in this release may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Words such as "will", "expect", "believe", "estimate", "continue", "anticipate", "intend", "plan" and similar expressions are intended to identify these forward-looking statements. Forward-looking statements discuss management's current expectations and projections relating to our financial position, results of operations, plans, objectives, future performance and business. All forward-looking statements are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different. You should evaluate all forward-looking statements in the context of the risks and uncertainties disclosed under the heading "Risk Factors" in Part I, Item 1A of Hamilton Lane's Annual Report on Form 10-K for the fiscal year ended March 31, 2024 and subsequent reports filed from time to time with the Securities and Exchange Commission. The forward-looking statements included in this release are made only as of the date hereof. Hamilton Lane undertakes no obligation to update or revise any forward-looking statement as a result of new information or future events, except as otherwise required by law.

About Avista Capital Partners

Founded in 2005, Avista Capital is a leading New York-based private equity firm with over $8 billion invested in more than 45 growth-oriented healthcare businesses globally. Avista partners with businesses that feature strong management teams, stable cash flows and robust growth prospects – targeting healthcare product and technology businesses with clear scale potential across six sub-sectors experiencing strong tailwinds. The team is supported by a group of seasoned Strategic Executives enhancing the entire investment process through strategic insight, operational oversight and senior counsel, which helps drive growth and performance, while fostering sustainable businesses and creating long-term value for all stakeholders. For more information, visit www.avistacap.com or follow Avista on LinkedIn.

About Hamilton Lane

Hamilton Lane (Nasdaq: HLNE) is one of the largest private markets investment firms globally, providing innovative solutions to institutional and private wealth investors around the world. Dedicated exclusively to private markets investing for more than 30 years, the firm currently employs approximately 700 professionals operating in offices throughout North America, Europe, Asia Pacific and the Middle East. Hamilton Lane has over $920 billion in assets under management and supervision, composed of more than $124 billion in discretionary assets and approximately $796 billion in non-discretionary assets, as of March 31, 2024. Hamilton Lane specializes in building flexible investment programs that provide clients access to the full spectrum of private markets strategies, sectors and geographies. For more information, please visit our website or follow Hamilton Lane on LinkedIn.

About Cosette

Cosette Pharmaceuticals, Inc. ("Cosette") is a US-based, fully integrated pharmaceutical company with a fast-growing portfolio of branded pharmaceuticals consisting of products in women's health, cardiology and dermatology. Cosette has a long history in quality manufacturing of complex dosage forms including topical creams, ointments, oral liquids/solutions and suppositories. Cosette has corporate and manufacturing facilities in New Jersey and North Carolina and is supported by 350+ dedicated employees across all functional areas. Cosette is backed by Avista Capital Partners, a healthcare focused private equity firm, and funds managed by Hamilton Lane, a private markets investment management firm (Nasdaq: HLNE). For more information, please visit www.cosettepharma.com or follow Cosette on LinkedIn.

Contacts:

For Avista Capital Partners:

Daniel Yunger / William Halliday
Kekst CNC
daniel.yunger@kekstcnc.com / william.halliday@kekstcnc.com

For Hamilton Lane:

Kate McGann
kmcgann@hamiltonlane.com

For Cosette Pharmaceuticals:

Lynn Munroe
Maracaibo Media Group
lynn@maracaibomedia.com

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SOURCE Avista Capital Partners

FAQ

What is the significance of Hamilton Lane's investment in Cosette Pharmaceuticals?

Hamilton Lane's investment provides Cosette Pharmaceuticals with additional capital and expertise to drive further growth through investments in business development and R&D. This partnership aims to accelerate innovation and explore larger M&A opportunities as part of Cosette's growth strategy.

How has Cosette Pharmaceuticals performed since Avista's initial investment in 2018?

Since Avista's initial investment in December 2018, Cosette Pharmaceuticals has demonstrated robust EBITDA growth and free cash flow generation. The company has successfully launched new products, expanded its portfolio through acquisitions and licensing deals, and diversified into branded products.

What new financing arrangements has Cosette Pharmaceuticals secured?

Cosette Pharmaceuticals has entered into a new term loan financing with Hayfin Capital Management and a new revolver provided by UBS Investment Bank, Capital One, National Association, and Santander Corporate & Investment Bank. These arrangements will support the company's ongoing growth initiatives.

How will the partnership between Avista Capital Partners and Hamilton Lane (HLNE) affect Cosette Pharmaceuticals?

The partnership between Avista Capital Partners and Hamilton Lane (HLNE) is expected to enhance Cosette Pharmaceuticals' ability to drive further growth. It will provide additional expertise and resources for investments in business development, R&D, and strategic acquisitions, supporting Cosette's mission to build a high-growth, branded pharmaceutical company.