Marathon Asset Management Announces Acquisition of Kaléo

Marathon Asset Management today announced the signing of a definitive agreement for the acquisition of Kaléo, a privately held pharmaceutical company based in Richmond, Virginia, by funds managed by Marathon. The total base purchase price is approximately $310 million in cash, less certain adjustments, and includes potential net revenue-based milestone payments of up to approximately $70 million in cash for the 2022 and 2023 fiscal years, in a transaction that will provide liquidity for Kaléo shareholders upon closing. This new ownership structure will accelerate Kaléo's growth serving patients at risk for anaphylaxis and other serious and life-threatening conditions.

"The sales trajectory of Kaléo has been impressive, and we view the company as a platform for growth," said Dr. Evan Bedil, Head of Healthcare at Marathon. "We plan to leverage the company's strong portfolio of intellectual property, its leading reputation among allergists and its experienced management team, to pursue multiple avenues of growth in the coming years."

An industry leader in human factors engineering and drug-device combination product development and manufacturing, Kaléo has developed the patented Aerio® Auto-Injection Platform which can deliver a wide range of formulation volumes and viscosities to meet the growing unmet needs of the pharmaceutical industry.

"Kaléo's executive management team enthusiastically looks forward to joining forces with Marathon, which has been a strong ally of Kaléo as a lender for many years," said Ronald Gunn, President and CEO of Kaléo. "With its vast resources and well-established capital base, we have found the strongest possible partner to help us commercialize our significant intellectual property and write the next chapter in Kaléo's story."

Kaléo is best known for the development and commercialization of the AUVI-Q® (epinephrine injection, USP) 0.15 mg and 0.3 mg, as well as AUVI-q® (epinephrine injection, USP) 0.1 mg, the first and only FDA approved epinephrine auto-injector designed for infants and toddlers weighing from 16.5 to 33 pounds.

"The acquisition of Kaléo represents a strategic investment for our healthcare franchise," said Randy Raisman, Managing Director, in Marathon Asset Management's Capital Solutions Group. "We believe that Kaléo has solid growth prospects driven by co-development opportunities, expected market share gains through expanded market access, and growth in awareness among patients."

The Kaléo Board of Directors unanimously approved the transaction and approval by the requisite shareholders has been obtained. Subject to regulatory clearances, closing is expected to take place on or prior to December 31, 2021.

Marathon received legal advice for the transaction from Covington & Burling LLP and Leason Ellis LLP. Morgan Stanley & Co. LLC acted as financial advisor and Hunton Andrews Kurth LLP acted as legal counsel to Kaléo.

Kaléo will remain headquartered in Richmond, Virginia.

About Marathon Asset Management

Marathon Asset Management LP, with $23 billion of assets under management, was formed in 1998 by Bruce Richards (Chairman & Chief Executive Officer) and Louis Hanover (Chief Investment Officer). The firm seeks attractive absolute returns through investments in the global capital markets and the private credit markets whereby it is known for its ability to provide capital solutions to companies across industries. Marathon's healthcare team is known for buying pharmaceutical royalties in addition to providing capital solutions. Marathon has significant experience investing in companies through multiple cycles. Marathon possesses a unique, broad-based skill set and proprietary platform to research, analyze and act upon complex capital structures and situations. For additional information, please visit www.marathonfund.com.

About Kaléo

Kaléo is a fully integrated pharmaceutical company dedicated to inventing, manufacturing and commercializing life-transforming products that empower patients with certain serious and life-threatening medical conditions to live fuller, bolder lives. We believe patients and caregivers are the experts on how medical conditions impact their lives, and so we include them as an integral part of our development process and consider their needs foremost. Kaléo's innovative auto-injection technologies are protected by an extensive intellectual property portfolio of more than 200 issued patents. Kaléo is headquartered in Richmond, Virginia in the United States. For more information, visit www.kaleo.com.