Novavax Inc and King Pharmaceuticals Inc announced that in conjunction with King Pharmaceuticals' previously announced strategy to divest many of its women's health products, Novavax and King have mutually agreed to end their co-promotion agreement for Estrasorb (estradiol topical emulsion) enabling Novavax to reacquire all rights worldwide for this product, as well as all rights to other women's health products that Novavax may successfully develop utilizing its micellar nanoparticle (MNP) technology, a release from King Pharmaceuticals said.
Under the terms of the transaction, Novavax will reacquire all of King's rights in Estrasorb and other women's health products Novavax may successfully develop and will repurchase all Novavax convertible notes held by King. Additionally, Novavax will acquire a portion of King's women's health sales force to provide competitive sales force coverage. Novavax will also receive from King approximately $8 million in cash to provide additional support for marketing and promoting Estrasorb. In return, Novavax will pay King $22 million in cash and issue to King 3,775,610 shares of Novavax common stock.
With the completion of the transaction, King will hold approximately 4.1 million shares of Novavax common stock, or approximately 10.4 per cent of the total 39.6 million shares of Novavax common stock outstanding.
"This is a positive and transformational event for Novavax," said Nelson M. Sims, Novavax's president and CEO. "Estrasorb has significant market potential both in the US and abroad. With King exiting women's health, we have the opportunity to reacquire all Estrasorb rights on terms that are accretive to earnings over the life of the product. We also will reacquire full participation in the international rights for Estrasorb and our other women's health products planned or under development that utilize our proprietary MNP technology. In addition, after accounting for this transaction, the financing will add over $23 million to our balance sheet to support Estrasorb as well as our other strategic initiatives," he added further.
Brian A Markison, president and chief executive officer of King, commented, "We believe Estrasorb has the potential to be very successful and King will have the continuing opportunity to participate in such success through our equity investment in Novavax. This transaction is a further extension of our previously announced intent and strategic decision to divest many, if not all, of our women's health products. Such divestitures should enable our Company to focus more intently on in-licensing, development, acquisition, and promotion of branded prescription pharmaceutical products in other key therapeutic areas that we believe are strategically important to the future success and growth of our Company."
In conjunction with the transaction, Novavax also announced that it has entered into definitive agreements for the private placement of $35 million principal amount of senior convertible notes to a group of institutional investors and 952,381 shares of Novavax common stock at $5.25 per share to an additional investor for aggregate gross proceeds to Novavax of $40 million, the release added.