Eagle Pharmaceuticals has acquired Arsia Therapeutics, an early-stage biotechnology firm with proprietary viscosity-reducing technology and formulation know-how. The acquisition will mark Eagle’s entry into biologics, the fastest growing sector of the pharmaceuticals market, and will allow the company to apply its strategy to offer “biobetter” formulations, and to aid in the development of novel biologics.

“Arsia will significantly enhance Eagle’s formulation capabilities and greatly expand our product development opportunities. Biologics are a multi-billion-dollar sector of the global pharmaceuticals market and we are fortunate to be collaborating with some of the world’s leading minds in the field,” said Scott Tarriff, president and chief executive officer, Eagle. “While large pharmaceutical companies around the world invest heavily in biosimilars, Eagle’s and Arsia’s combined know-how and execution capabilities will allow us to improve upon those formulations to create biobetters, which we believe will be key to product differentiation, pricing power and larger market share. Importantly, Arsia currently has several early stage partnerships with pharmaceutical companies. We plan to partner with key biosimilar companies to help alter their existing pipelines into biobetters. This is a natural extension of Eagle’s business model, applied to the biologics space.”

Eagle will pay approximately $30 million at closing and has also agreed to pay up to $48 million in additional payments upon the completion of certain milestones, for aggregate potential payments of $78 million. Arsia founders and renowned MIT professors, Dr. Robert Langer and Dr. Alexander Klibanov, as well as other key members of the Arsia team, have simultaneously entered into agreements that are effective upon the closing of the acquisition to work with Eagle to develop new formulations and solve delivery challenges in the large molecules space.

In addition to acquiring Arsia’s technology platform, Eagle plans to establish a Biologics Innovation Center in Kendall Square in Cambridge, MA.

“The technology developed by Arsia demonstrates tremendous promise in solving a variety of fundamental pharmaceutical challenges in the delivery of high-dose biologics,” said Dr. Robert Langer. “Through the establishment of the Biologics Formulation Innovation Center and by joining forces with Eagle we are excited to expand the application of this technology to address formulation challenges with a wide range of therapeutic agents.”

It is estimated that the global biosimilar market may reach $20-$26 billion by 20201. The European Medicines Agency (EMA) provided the regulatory approval framework for biosimilars, approving the first biosimilar in 2006. There have been 22 different biosimilar products approved by the European Union as of March 2016. The first biosimilar was approved in the U.S. in March 2015, with four biosimilars approved as of October 2016.