Mayne Pharma Group Limited (ASX: MYX) has completed the sale of its US retail generics portfolio to Dr. Reddy’s Laboratories SA, a subsidiary of Dr. Reddy’s Laboratories Ltd for upfront cash consideration of US$90 million (~A$134 million).
The total amount of cash received at closing is approximately US$93.8 million (~A$140 million), which includes the upfront cash consideration and approximately US$24 million for working capital, offset by ~US$21 million for accrued liabilities related to the sale of the products in the US market prior to closing.
The agreement also provides for up to US$15 million (~A$22 million) in future contingent milestone payments. Transaction and one-time restructuring costs are being finalised, but are currently expected to comprise approximately US$1 million of transaction costs, plus between US$6 million and US$11 million of one-time restructuring costs.
The divestiture of our US retail generics portfolio is yet another milestone in the transformation of Mayne Pharma into a specialty pharmaceutical company in the US women’s healthcare and dermatology markets,” CEO, Shawn Patrick O’Brien, said.
“We are excited by the significant opportunities to drive operational, commercial and financial improvements across our US women’s health and dermatology businesses, as well as in our International business.
“Our stated objectives remain to return the company to profitability, to generate operating cash flow that supports further growth and to drive improved returns for our shareholders.”
Mayne Pharma and Dr Reddy’s are working together to ensure a smooth transition for customers.
