Sagent Pharmaceuticals, Inc., a leading provider of affordable pharmaceuticals to the hospital market, has entered into a definitive agreement with Teva Pharmaceutical Industries Ltd. (Teva) and Actavis LLC to acquire a portfolio of five Abbreviated New Drug Applications (ANDAs) in the US for $40 million. The acquired portfolio includes products that are being divested by Teva as a precondition to its closing of the acquisition of Allergan's generics business.
Sagent has agreed to acquire five ANDAs from Teva for $40 million including Propofol Injectable Emulsion, 1%. Total market sales for the five ANDAs are $340 million on a trailing twelve month basis, per IMS Health. The portfolio is expected to generate $40 to $50 million in revenue on an annualized basis.
"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," noted Allan Oberman, chief executive officer of Sagent. "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."
Oberman explained, "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."
The total market sales for the five ANDAs are $340 million on a trailing twelve month basis, per IMS Health. The acquisition will allow Sagent to expand its portfolio, enhance operational performance through margin expansion, expand supply to existing customers, and enter into new channels and markets. The portfolio is expected to generate $40 to $50 million in revenue on an annualized basis. It is important to note that the Sagent distribution agreement with Teva for Propofol was set to expire in the second quarter of 2018. Sagent currently accounts for approximately 12 percent market share of Propofol sales in the US.
Sagent will finance the transaction through its existing $80 million revolving credit facility, which currently has no borrowings outstanding. The acquisition of these ANDAs is contingent on the closing of the Teva/Allergan generics transaction and approval by the US Federal Trade Commission of Sagent as a buyer.