Pliva yesterday said it has signed a deal with Canada’s Legacy Pharma to sell the central nervous system unit of its branded drugs subsidiary, Odyssey Pharmaceuticals, for $62.5 million. The move follows its decision in May to exit the US proprietary business and put its faith into generics [[17/05/05c]].
Chief executive, Zeljko Covic, noted: “We are pleased that we have demonstrated the ability to move quickly in executing our decision to exit the US branded pharmaceuticals business, as well as the ability to secure what we believe are good deals for both Sanctura and the CNS franchise.” He added: “We expect that divestments of remaining Odyssey products will also contribute positively to our bottom line, and plan to reinvest the proceeds from these transactions into further growing our generics business.”
In May, Pliva announced that it has sold the rights to its overactive bladder therapy Sanctura to (trospium) to Saturn Pharmacueticals - a private US firm – for $140 million dollars [[17/05/05c]]. And, under the terms of this latest deal, Pliva will receive cash of $62.5 million, comprising $5 million upon signing, $47.5 million upon closing the transaction and up to $10 million upon the achievement of certain product sales milestones. Pliva will also be entitled to receive royalties on net sales above certain thresholds and on any future product line extensions for a seven-year period.
Closure of the deal is expected to take place by the end of September and should result in an exceptional gain of $13.4 million in the third quarter. Pliva expects to divest additional Odyssey products during the second half of the year. However, its plan to focus solely on generics may come under greater scrutiny now in the wake of Teva’s latest financial results; a slowing down in the US generics market as well as increased competition saw it lean on its branded offerings for the quarter [[01/08/05b]].