Activist investment fund Starboard Value LP, which forced pharmaceuticals company Perrigo Company plc (NYSE; TASE: PRGO) to replace five directors, has forced another move on the company, namely the sale of one of its most important assets.
Perrigo announced yesterday that it had signed a definitive agreement to divest its rights to the royalty stream from the global net sales of the multiple sclerosis drug Tysabri (natalizumab) to RPI Finance Trust, an affiliate of Royalty Pharma, for up to $2.85 billion, composed of $2.2 billion in cash at closing and up to $650 million in potential milestone payments based upon future global net sales of Tysabri in 2018 and 2020. This transaction is expected to close within 30 business days, subject to certain specified closing deliverables.
Perrigo's share price is currently down 9.44% on the Tel Aviv Stock Exchange.
Perrigo also announced that it was postponing release of its full financial statements for 2016, and that it would lay off 750 employees, about 14% of its non-production workforce. In an additional development, Perrigo CFO Judy L. Brown has resigned to take a position with another company in the pharmaceutical industry. She is being replaced by Ron Winowiecki, Senior Vice President, Business Finance.
Perrigo CEO John T. Hendrickson said of the Tysabri sale, "Today's announcement is the result of Perrigo's review of strategic alternatives for the Tysabri royalty stream announced in November 2016. We are pleased to have reached an agreement that maximizes the value of this non-core asset. While dilutive to adjusted EPS, the significant upfront cash component will allow us to de-lever our balance sheet, which supports our investment grade financial policy, and better positions Perrigo to pursue our strategic plan. This transaction also furthers our stated strategy to enhance our portfolio and focus on our consumer-facing and Rx businesses."
Perrigo acquired the rights to the Tysabri royalty stream through its 2013 acquisition of Elan Corporation plc.
Starboard holds 6.7% of Perrigo.
Published by Globes [online], Israel business news - www.globes-online.com - on February 28, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017