Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) last night announced that it has entered into a definitive agreement to sell its Paragard intrauterine copper contraceptive to CooperSurgical for $1.1 billion in cash. Paragard, a part of Teva's women's health portfolio, had revenue of $168 million in the 12 months up to June 30, 2017. The deal includes Teva’s manufacturing facility in Buffalo, New York which produces Paragard.
The financially troubled Israeli pharmaceutical company is selling assets to reduce over $30 billion in debt, which it assumed following the acquisition of Actavis last year. After the company's share price went into freefall last month following disappointing second quarter results, Teva's share price rose 19.35% on Wall Street last night to $18.50, giving a market cap of $18.78 billion, after announcing the appointment of Lundbeck CEO Kåre Schultz as its new CEO. The share price rose a further 1.57% to $18.79 in aftermarket trading.
Teva interim CEO Dr. Yitzhak Peterburg said, “CooperSurgical’s commitment to women's health, fertility and diagnostics, will help to assure that patients in the US continue to benefit from access to Paragard. This is an important step towards completing the divestments we have promised our stakeholders. Teva will use the proceeds from the sale to repay term loan debt under its senior credit facility.”
Teva said that it continues to actively pursue additional divestiture opportunities, including the sale of the remaining assets of its global Women's Health business, as well as its Oncology and Pain businesses in Europe. Teva added that it expects to generate at least $2 billion in total proceeds from the sale of these businesses, as well as additional asset sales to be executed by year end 2017.
Peterburg continued, “Today’s announcement emphasizes our commitment to divest non-core businesses to ensure that Teva is even more focused and efficient in this rapidly changing and highly-competitive environment.”
Teva stressed that it is reinforcing its strategic focus on CNS and Respiratory as its core global therapeutic areas of focus within Global Specialty Medicines. In these areas, Teva said that it maintains a strong pipeline and portfolio globally, and will continue to invest in creating long term value.
The deal is expected to close before the end of 2017 and until it is completed, Teva will continue to manufacture and sell Paragard in the US.
Morgan Stanley and Ernst & Young acted as advisors to Teva and Goodwin Procter as Teva’s legal counsel for this deal.
Published by Globes [online], Israel business news - www.globes-online.com - on September 12, 2017
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