Andrx Corporation says that it will be selling its loss-making branded pharmaceuticals business as part of a bid to focus its efforts on development and distribution. The US company also said it would be terminating a supply and distribution agreement with Pfizer for a sustained-release version of its alpha-blocker, Cardura XL (doxazosin), after the product failed to win US Food and Drug Administration approval by the end of last year.
In a statement, Andrx’ chief executive, explained that the firm’s board had decided to take the steps to concentrate on what it views as its core competencies of controlled release pharmaceuticals and distribution, as well as initiatives, such as its agreement with Takeda Pharmaceuticals, that will use its controlled-release technologies in developing new brand products for third parties.
Andrx says that it has engaged the services of Banc of America Securities to seek offers for the brand business, which is primarily a sales and marketing organisation with a limited number of products. It incurred operating losses in the region of $31 million dollars in the first nine months of 2004, and Andrx expects the unit will continue to record and operating loss until the disposal is complete.
The investment community took the news well, sending the company’s share price up by almost 3% by the close of trade on the Nasdaq yesterday. Investors were also no doubt pleased to hear that Andrx expects a refund of the $10 million it initially paid in connection with the Pfizer agreement.