SCHAUMBURG, Ill.—Sagent Pharmaceuticals Inc. has entered into a definitive agreement with Teva Pharmaceutical Industries Ltd. and Actavis LLC to acquire a portfolio of five Abbreviated New Drug Applications (ANDAs) in the United States for $40 million. Sagent intends to finance the deal through its existing $80-million revolving credit facility.
Among the acquired ANDAs is Propofol Injectable Emulsion 1%. All told, total market sales for these five ANDAs come to $340 million on a trailing 12-month basis, according to IMS Health, and the portfolio is forecasted to generate between $40 million and $50 million in revenue on an annualized basis. Sagent previously had a distribution agreement with Teva for Propofol that was scheduled to expire in the second quarter of 2018. At present, Sagent accounts for roughly 12-percent market share of Propofol sales in the United States.
"This agreement is a perfect example of the implementation of our ‘Triple E' growth strategy, both expanding our product offering and executing a strategic acquisition," Allan Oberman, CEO of Sagent, remarked in a press release. "We have built a strong collaborative partnership with Teva over the past several years, and we are pleased to secure these significant products for the future, given that Propofol was our second-largest selling product by revenue in 2015. Importantly, because we have been distributing Propofol in conjunction with Teva, the agreement creates a seamless ownership transition for our customers."
"Our unique business model is perfectly designed to facilitate such divestiture agreements. The depth of our development and manufacturing relationships, combined with our wide range of capabilities for a variety of configurations and our ability to handle different types of products, means we are able to quickly and successfully initiate transfer activities. We are excited to add these margin-enhancing assets to our robust portfolio and remain committed to pursuing similar accretive transactions as part of our ‘Triple E' growth strategy," he added.
Among the acquired ANDAs are products Teva is divesting as a precondition of its closing of the acquisition of Allergan's generics business. Sagent's acquisition of the five ANDAs is contingent on the closing of Teva's acquisition of the Allergan generics business and approval by the U.S. Federal Trade Commission of Sagent as a buyer.
Teva's deal with Allergan is continuing apace. Teva announced on March 10 that it had received regulatory approval from the European Commission for the transaction. In an effort to have the $40-billion deal approved, Teva has agreed to divest certain overlapping molecules in 24 European countries, other than the United Kingdom, Ireland and Iceland. The deal is expected to close by the end of June. As for Allergan, the company announced on May 10 that its board of directors had authorized a new share repurchase program of up to $10 billion of the company's common stock. The program is pending the completion of (and the funds from) the deal with Teva.