Dechra Pharmaceuticals PLC (Dechra or Group), an international specialist veterinary pharmaceuticals and relates products business, has acquired the trade and assets of PSPC Inc (PSPC) for a consideration of up to US$ 10 million. PSPC’s principal product is Phycox, a patented nutraceutical currently achieving sales in North America of approximately US$ 4.5 million per annum. Phycox competes in the US Veterinary joint health supplement market, a sector estimated at US$ 55 million.
Additionally a new product in the final phase of development is anticipated to be launched in the first half of the next financial year (ending June 2015) and is expected to bolster Dechra’s endocrinology therapeutic category. Based in Melbourne Florida, USA, PSPC’s assets include intellectual property, ‘know-how’, inventory and manufacturing equipment.
Dechra is also currently in negotiations to buy PSPC’s US manufacturing facility. US$ 8.5 million of the consideration is payable in cash on completion and US$ 1.5 million is contingent upon the successful registration of the new product. As part of the acquisition arrangements
Dechra will also pay an initial royalty of 10 per cent on total net sales, increasing by 2.5per cent if annualised sales achieve in excess of US$ 7.5 million with an additional 2.5 per cent payable on annualised sales in excess of US$ 12.5 million for the life of the Phycox patent. Ian Page, chief executive officer, said: “This deal coupled with the launch of Osphos which we announced earlier this month, clearly demonstrates the continuing delivery of our strategic ambitions. Both Osphos and Phycox complement Dechra’s existing US product portfolio and should provide growth opportunities over the coming years.”
“In relation to today’s announcement, we are confident that we can build upon the strong penetration Phycox has already achieved in a fragmented but growing market by leveraging Dechra’s established sales and marketing expertise behind Phycox which has had little historical marketing support We are also very excited about the opportunity that the new product, already at an advanced stage of development, can deliver.”
The acquisition is expected to be completed by the end of June 2014. PSPC.