Teva Pharmaceutical Industries Ltd. has entered an agreement for the sale of a contraceptive product within its global women’s health business for $1.1 billion in cash to US medical equipment manufacturer CooperSurgical Inc.
Under the deal, CooperSurgical will buy Teva’s Paragard, an intrauterine copper contraceptive, which had revenues of some $168 million for the twelve months ending June 30. The transaction includes Teva’s manufacturing facility in Buffalo, New York, which exclusively produces Paragard, the Israeli drug-maker said in a statement late Monday.
Paragard is a copper-releasing device that is placed in the uterus to prevent pregnancy for up to 10 years.
Teva shares rose almost 9 percent at 10:59am in Tel Aviv Tuesday, after its US traded shares jumped 19% on Monday, as the company said it had appointed Kåre Schultz to become its President and Chief Executive Officer. Schultz will be tasked with setting out Teva’s strategy, divesting assets, cutting its debt and restoring investor confidence.
Teva is selling assets to reduce its $30 billion debt which ballooned after the firm acquired drug company Actavis Generics for $40 billion in 2016. The deal turned out to be an expensive venture that eventually resulted in the stepping down of Teva’s CEO Erez Vigodman in February 2017.
Teva expects to generate at least $2 billion in total proceeds from the sale of businesses — including the sale of the remaining assets of its women’s health business as well as its oncology and pain businesses in Europe, in addition to other asset sales that will be executed by year end 2017, Monday’s statement said.
“This is an important step toward completing the divestments we have promised our stakeholders,” said Yitzhak Peterburg, Teva’s interim CEO. Teva will use the proceeds from the sale to repay debt, he said.
“Today’s announcement emphasizes our commitment to divest non-core businesses to ensure that Teva is even more focused and efficient in this rapidly changing and highly-competitive environment,” Peterburg added.
With the divestiture of Paragard and the planned divestiture of other global women’s health products and the oncology and pain business in Europe, Teva said that it is “reinforcing its strategic focus” on the central nervous system and respiratory activities as its “core global therapeutic areas of focus.”
“In these areas Teva maintains a strong pipeline and portfolio globally, and will continue to invest in creating long term value”, the statement said.
Completion of the transaction with CooperSurgical is subject to conditions, including antitrust clearance in the US. The deal is expected to close before the end of 2017. Until then, Teva will continue to manufacture and sell Paragard in the US, the firm said.