Takeda To Divest Select OTC and Rx Products to Orifarm in $670-M Deal
Takeda has agreed to divest to Orifarm Group, an Odense, Denmark-based generic-drug company, a portfolio of approximately 110 select over-the-counter (OTC) and prescription pharmaceutical products sold in Europe and two manufacturing sites in Denmark and Poland, in a deal worth up to $670 million.
Under the deal, Orifarm will pay approximately $505 million to Takeda in cash at closing, and approximately $70 million in non-contingent cash to be paid within four years post-closing. In addition, Takeda may receive up to an additional $95 million in potential milestone payments. The deal is subject to customary legal and regulatory closing conditions.
The portfolio to be divested to Orifarm includes a variety of OTC products and food supplements as well as select prescription products in the respiratory, anti-inflammatory, cardiovascular, and endocrinology therapeutic areas sold predominantly in Denmark, Norway, Belgium, Poland, Finland, Sweden, the Baltics and Austria. Under the agreement, Orifarm will acquire the rights, title, and interest to the products in the portfolio exclusive to these countries. The portfolio generated fiscal year 2018 net sales of approximately $230 million. The products are considered to be non-core assets outside of Takeda’s main therapeutic focus of gastroenterology, rare diseases, plasma-derived therapies, oncology, and neuroscience.
Takeda and Orifarm will also enter into additional manufacturing and supply agreements, under which Takeda will continue to manufacture selected products on behalf of Orifarm. Takeda expects that approximately 600 employees from the manufacturing sites, sales and marketing professionals, and other select professionals supporting the portfolio and manufacturing sites to be divested will transition to Orifarm at the closing of the transaction.
The transaction is expected to close by the end of fiscal year 2020 (ending March 2021), subject to the satisfaction of customary closing conditions, receipt of required regulatory clearances and, where applicable, compliance with local works council requirements. Until then, the products will continue to be made available to patients and manufactured and supplied by Takeda.
Other recent divestments by Takeda
The divestment is part of a larger corporate strategy by Takeda to divest non-core assets to reduce debt following its $62-billion acquisition of Shire in 2019. Over the past 12 months (as reported on April 24, 2020), Takeda has announced a series of divestments to meet of a goal to divest approximately $10 billion in non-core assets and focus on its key business areas.
Last month (March 2020), Takeda announced the sale of non-core products in Latin America to Hypera Pharma, an Itaim Bibi, Sao Paulo, Brazil-based company specializing in dermocosmetics, vitamin supplements, and other health products, for $825 million. Takeda also completed sales of non-core assets spanning the Russia–CIS region to Stada, a Bad Vilbel, Germany-based generic and OTC drug company, for $660 million, and in countries spanning the Near East, Middle East and Africa region to Acino, a Zurich-based pharmaceutical company, for over $200 million last month (March 2020). Also, in July 2019, Takeda completed the sale to Novartis of Xiidra (lifitegrast ophthalmic solution), a prescription drug for treating dry eye, in a $5.3-billion deal ($3.4 billion upfront and up to $1.9 billion in potential milestones).
One divestment that will not proceed forward is the deal, announced in May 2019, between Takeda and Johnson & Johnson (J&J) for the sale of Takeda’s TachoSil, a fibrin sealant patch to control bleeding post-surgery, to J&J’s Ethicon for $400 million. The US Federal Trade Commission (FTC) closed its investigation into the proposed deal earlier this month (April 2020) with a move to block the deal. The investigation focused on the potential loss of competition between TachoSil and J&J’s Evarrest, the only two fibrin sealant patches approved in the US to stop bleeding during surgery.