aaiPharma Inc. said that it has entered into a definitive agreement to sell its MVI (Multi-Vitamin Infusion) and Aquasol product business to Mayne Pharma (USA) Inc, a subsidiary of Australia's Mayne Group Ltd.
Under terms of the agreement, aaiPharma will receive $100 million in cash from Mayne upon closing of the transaction, and an additional $5 million contingent cash payment upon US Food and Drug Administration (FDA) approval of a Supplemental New Drug Application (sNDA) for a new MVI product, subject to certain adjustments. Royalties on certain sales levels of this new product will be paid to aaiPharma as part of the agreement.
"The sale of this business is consistent with aaiPharma's long-term corporate strategy to focus on pain management while leveraging the non-pain components of our business for the greatest value for both shareholders and physicians," stated Dr Philip Tabbiner, CEO of aaiPharma. "With its robust portfolio of injectable pharmaceuticals, we believe Mayne Pharma is in an excellent position to fully leverage the enhancements we have made to the product line over the last two years. The proceeds from this sale will be used to further pay down our debt."
Since purchasing the MVI and Aquasol line from AstraZeneca in August 2001 for less than $100 million including the forthcoming final payment of $31.5 million, aaiPharma has brought innovative science to bear on reformulating and extending the product family, consistent with its strategy to improve well-known medicines through science. The company received approval of a New Drug Application (NDA) for MVI Adult, a reformulation of MVI-12 in single-dose and unit vial presentations in January 2004, as well as approval of an NDA for MVI Adult Pharmacy Bulk Package earlier this month. Details of the aforementioned sNDA are not disclosed for competitive reasons.
MVI-12 and MVI-Pediatric are multivitamin market leaders for patients who require intravenous feeding as a result of surgery, extensive burns, fractures and other trauma, severe infectious disease, or comatose states in which the replenishment of nutrients is critical. MVI Adult, the newest addition to the MVI family, is a reformulation of MVI- 12 in which concentrations of four vitamins are increased and vitamin K is added.
The Aquasol brands of nutritional products include Aquasol A parenteral (water-miscible vitamin A Palmitate), for the treatment of vitamin A deficiency and Aquasol E Drops (aqueous vitamin supplement), which are administered for the treatment of infants, children and adults with a vitamin E deficiency.
aaiPharma's sale of its MVI and Aquasol business to Mayne is subject to early termination or expiration of the waiting period mandated by the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and other contractual conditions.