Teva has announced two deals in quick succession to sell off the entirety of its women’s health business assets, raising almost $2.5bn that will go towards paying off its debts.
Ahead of the weekend the Israeli pharma group said it had agreed a deal to sell its Paragard intrauterine contraceptive to CooperSurgical for $1,1bn. Now, it has reached an agreement to sell the rest of the business to private equity firm CVC Capital Partners and Foundation Consumer Healthcare, an over-the-counter (OTC) drug specialist, for $1.38bn.
CVC is paying $703m in cash for the bulk of the unit’s products, which include fertility treatment Ovaleap (follitropin alfa), contraceptives Zoely (oestradiol/nomegestrol) and Seasonique (levonorgestrel/ethinylestradiol), menopause therapy Colpotrophine (promestriene) and Actonel (risedronate) for osteoporosis. The brands brought in $258m in sales last year.
The private equity group said that it planned to roll the brands into “a leading global women’s healthcare platform through further investments and acquisitions”, addressing a market estimated at around $30bn globally.
The second transaction with Foundation concerns Teva’s emergency contraceptives, including Plan B One-Step (levonorgestrel), with the OTC specialist paying $675m in case for a product that made $140m in sales in 2016.
Teva’s chief executive Yitzhak Peterburg – who will be replaced in the coming months by Lundbeck’s Kåre Schultz – said that the two deals means that the company has already exceeded its target of raising $2bn from non-core asset sales this year.
He added that the deals “progress our ability to repay term loan debt while also providing a clear path forward for these important products to continue to be available to women throughout the world”. The company ended 2016 with a market value below its debt level of $35bn, and has said it intends to pay down $5bn of its borrowing before the end of the year.
Teva is also planning to offload its oncology and pain business in Europe as part of a major restructuring drive forced by declining sales of its generic drug products – which came after it paid $40bn for Allergan’s generic drug operations – and the lingering effects of losing patent protection for multiple sclerosis blockbuster Copaxone (glatiramer acetate).
The company has already announced several thousand job cuts and the closure or sale of six manufacturing plants this year, with another nine under threat in 2018.